Yes, you must. Workers over the age of 70 or older can make wage deferral contributions to their IRA SIMPLES. Even after the age of 72 (70 1/2 if the worker reached the age of 70 before January 1, 2020), employers must continue to pay the minimum payments required after age 70 and continue to make matching or ineligible contributions to the WORKERS SIMPLES. Any eligible worker can contribute to the pay reduction and the employer must a: If you are an individual contractor or a partner, you deduct your own salary reduction contributions and your own appropriate or ineligible contributions on Form 1040, line 28. For example, Bob`s annual salary is $50,000 and he begins contributing to his employer`s ALLER IRA plan on September 1. It contributes $1,536 until December 31. Bob`s employer must compare Bob`s contributions up to 3% of Bob`s calendar year`s earnings or 1500 $US (3% of $50,000). It doesn`t matter that Bob only contributed to the plan in the last 4 months of the calendar year. An employee can defer up to $13,500 in 2020 and 2021 ($13,000 in 2018; $12,500 in 2016- 2018, subject to cost of living adjustment for future years).
Workers aged 50 and over can make a catch-up contribution of up to $3,000 between 2016 and 2021 (subject to cost of living adjustment for subsequent years). Salary reductions under an IRA SIMPLE plan are “electoral adjournments” that are charged on the overall annual cap on electoral delays that a worker can make on these and other plans that allow electoral delays. The Ministry of Labour`s rule for filing contributions to the salary reduction may be stricter. You have a safe harbor rule at seven plants. For example, Joe`s annual salary is US$70,000 and he contributed 1% of his allowance or 700 $US to his employer`s simple IRA plan. Joe`s employer must make an equivalent contribution of $700, as the employer must only respect the amount actually paid by Joe during the year up to a maximum of 3% of his annual earnings. A contribution to the salary reduction is an amount that a worker chooses for contributing to his SIMPLE IRA instead of being paid in cash.
Categorised as: Uncategorized
Comments are disabled on this post