Individual Retirement Accounts » SIMPLE IRAs

2008 Contribution Limits and Deadlines

Employee contributions are limited to the lesser of 100% of eligible compensation or $10,500 ($13,000 for participants aged 50 or greater). Employers are required to match their employees dollar-for-dollar up to 3% of their eligible compensation or to make a 2% non-elective contribution for all eligible employees.

The employer match cannot exceed $10,500 (or $13,000 for individuals aged 50+). The match can be reduced two out of five years but can never be reduced below 1%. For the 2% non-elective contributions, the employer funds all employees regardless of participation in salary deferrals.

The non-elective contribution is limited by the eligible compensation cap of $230,000.

Employees are 100% vested in all contributions made. Employee contributions must be made into the plan in the year that they were earned by the 15th day of the month following the month the contributions were taken out of the employee's paycheck (The DOL requires that deferrals must be contributed as soon as they are separated from operating expenses if this is sooner than the 15th of the following month that is when the contribution is due).

Employer contributions must be made by their tax-filing deadline, plus any extensions.