PDF document

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OMB No. 1545-1502
Savings Incentive Match Plan for
Form 5305-SIMPLE Do not file
(Rev. March 2012) Employees of Small Employers (SIMPLE)— with the Internal
Department of the Treasury for Use With a Designated Financial Institution Revenue Service
Internal Revenue Service

establishes the following SIMPLE
Name of Employer
IRA plan under section 408(p) of the Internal Revenue Code and pursuant to the instructions contained in this form.
Article I—Employee Eligibility Requirements (complete applicable box(es) and blanks—see instructions)
1 General Eligibility Requirements. The Employer agrees to permit salary reduction contributions to be made in each calendar year to the
SIMPLE individual retirement account or annuity established at the designated financial institution (SIMPLE IRA) for each employee who meets
the following requirements (select either 1a or 1b):
a Full Eligibility. All employees are eligible.
b Limited Eligibility. Eligibility is limited to employees who are described in both (i) and (ii) below:
(i) Current compensation. Employees who are reasonably expected to receive at least $ in compensation (not to
exceed $5,000) for calendar year.
(ii) Prior compensation. Employees who have received at least $ in compensation (not to exceed $5,000) during any
calendar year(s) (insert 0, 1, or 2) preceding the calendar year.
2 Excludable Employees
The Employer elects to exclude employees covered under a collective bargaining agreement for which retirement benefits were the subject
of good faith bargaining. Note: This box is deemed checked if the Employer maintains a qualified plan covering only such employees.
Article II—Salary Reduction Agreements (complete the box and blank, if applicable—see instructions)
1 Salary Reduction Election. An eligible employee may make an election to have his or her compensation for each pay period reduced. The total
amount of the reduction in the employee’s compensation for a calendar year cannot exceed the applicable amount for that year. See instructions.
2 Timing of Salary Reduction Elections
a For a calendar year, an eligible employee may make or modify a salary reduction election during the 60-day period immediately preceding
January 1 of that year. However, for the year in which the employee becomes eligible to make salary reduction contributions, the period
during which the employee may make or modify the election is a 60-day period that includes either the date the employee becomes eligible
or the day before.
b In addition to the election periods in 2a, eligible employees may make salary reduction elections or modify prior elections
. If the Employer chooses
this option, insert a period or periods (e.g., semi-annually, quarterly, monthly, or daily) that will apply uniformly to all eligible employees.
c No salary reduction election may apply to compensation that an employee received, or had a right to immediately receive, before
execution of the salary reduction election.
d An employee may terminate a salary reduction election at any time during the calendar year. If this box is checked, an employee who
terminates a salary reduction election not in accordance with 2b may not resume salary reduction contributions during the calendar year.
Article III—Contributions (complete the blank, if applicable—see instructions)
1 Salary Reduction Contributions. The amount by which the employee agrees to reduce his or her compensation will be contributed by the
Employer to the employee’s SIMPLE IRA.
2a Matching Contributions
(i) For each calendar year, the Employer will contribute a matching contribution to each eligible employee’s SIMPLE IRA equal to the
employee’s salary reduction contributions up to a limit of 3% of the employee’s compensation for the calendar year.
(ii) The Employer may reduce the 3% limit for the calendar year in (i) only if:
(1) The limit is not reduced below 1%; (2) The limit is not reduced for more than 2 calendar years during the 5-year period ending with
the calendar year the reduction is effective; and (3) Each employee is notified of the reduced limit within a reasonable period of
time before the employees’ 60-day election period for the calendar year (described in Article II, item 2a).
b Nonelective Contributions
(i) For any calendar year, instead of making matching contributions, the Employer may make nonelective contributions equal to 2% of
compensation for the calendar year to the SIMPLE IRA of each eligible employee who has at least $(not more than
$5,000) in compensation for the calendar year. No more than $250,000* in compensation can be taken into account in determining the
nonelective contribution for each eligible employee.
(ii) For any calendar year, the Employer may make 2% nonelective contributions instead of matching contributions only if:
(1) Each eligible employee is notified that a 2% nonelective contribution will be made instead of a matching contribution; and
(2) This notification is provided within a reasonable period of time before the employees’ 60-day election period for the calendar year
(described in Article II, item 2a).
3 Time and Manner of Contributions
a The Employer will make the salary reduction contributions (described in 1 above) to the designated financial institution for the IRAs established under
this SIMPLE IRA plan no later than 30 days after the end of the month in which the money is withheld from the employee’s pay. See instructions.
b The Employer will make the matching or nonelective contributions (described in 2a and 2b above) to the designated financial institution for
the IRAs established under this SIMPLE IRA plan no later than the due date for filing the Employer’s tax return, including extensions, for
the taxable year that includes the last day of the calendar year for which the contributions are made.
* This is the amount for 2012. For later years, the limit may be increased for cost-of-living adjustments. The IRS announces the increase, if any, in a news release, in
the Internal Revenue Bulletin, and on the IRS’s internet website at IRS.gov.
For Paperwork Reduction Act Notice, see instructions. Cat. No. 23063F Form 5305-SIMPLE (Rev. 3-2012)

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Form 5305-SIMPLE (Rev. 3-2012) Page 2
Article IV—Other Requirements and Provisions
1 Contributions in General. The Employer will make no contributions to the SIMPLE IRAs other than salary reduction contributions
(described in Article III, item 1) and matching or nonelective contributions (described in Article III, items 2a and 2b).
2 Vesting Requirements. All contributions made under this SIMPLE IRA plan are fully vested and nonforfeitable.
3 No Withdrawal Restrictions. The Employer may not require the employee to retain any portion of the contributions in his or her SIMPLE
IRA or otherwise impose any withdrawal restrictions.
4 No Cost Or Penalty For Transfers. The Employer will not impose any cost or penalty on a participant for the transfer of the participant’s
SIMPLE IRA balance to another IRA.
5 Amendments To This SIMPLE IRA Plan. This SIMPLE IRA plan may not be amended except to modify the entries inserted in the blanks
or boxes provided in Articles I, II, III, VI, and VII.
6 Effects Of Withdrawals and Rollovers
a An amount withdrawn from the SIMPLE IRA is generally includible in gross income. However, a SIMPLE IRA balance may be rolled over or
transferred on a tax-free basis to another IRA designed solely to hold funds under a SIMPLE IRA plan. In addition, an individual may roll
over or transfer his or her SIMPLE IRA balance to any IRA or eligible retirement plan after a 2-year period has expired since the individual
first participated in any SIMPLE IRA plan of the Employer. Any rollover or transfer must comply with the requirements of section 408.
b If an individual withdraws an amount from a SIMPLE IRA during the 2-year period beginning when the individual first participated in any
SIMPLE IRA plan of the Employer and the amount is subject to the additional tax on early distributions under section 72(t), this additional tax
is increased from 10% to 25%.

Article V—Definitions
1 Compensation
a General Definition of Compensation. Compensation means the sum of wages, tips, and other compensation from the Employer subject
to federal income tax withholding (as described in section 6051(a)(3)), the amounts paid for domestic service in a private home, local
college club, or local chapter of a college fraternity or sorority, and the employee’s salary reduction contributions made under this plan,
and, if applicable, elective deferrals under a section 401(k) plan, a SARSEP, or a section 403(b) annuity contract and compensation
deferred under a section 457 plan required to be reported by the Employer on Form W-2 (as described in section 6051(a)(8)).
b Compensation for Self-Employed Individuals. For self-employed individuals, compensation means the net earnings from self-employment
determined under section 1402(a), without regard to section 1402(c)(6), prior to subtracting any contributions made pursuant to this plan on
behalf of the individual.
2 Employee. Employee means a common-law employee of the Employer. The term employee also includes a self-employed individual and a
leased employee described in section 414(n) but does not include a nonresident alien who received no earned income from the Employer that
constitutes income from sources within the United States.
3 Eligible Employee. An eligible employee means an employee who satisfies the conditions in Article I, item 1 and is not excluded under
Article I, item 2.
4 Designated Financial Institution. A designated financial institution is a trustee, custodian, or insurance company (that issues annuity
contracts) for the SIMPLE IRA plan that receives all contributions made pursuant to the SIMPLE IRA plan and deposits those contributions to
the SIMPLE IRA of each eligible employee.
Article VI—Procedures for Withdrawals and Transfers (The designated financial institution will provide the instructions
(to be attached or inserted in the space below) on the procedures for withdrawals of contributions by employees.)

Article VII—Effective Date

This SIMPLE IRA plan is effective . See instructions.

* * * * *

Name of Employer By: Signature Date

Address of Employer Name and title

The undersigned agrees to serve as designated financial institution, receiving all contributions made pursuant to this SIMPLE IRA plan and
depositing those contributions to the SIMPLE IRA of each eligible employee as soon as practicable. Upon the request of any participant, the
undersigned also agrees to transfer the participant’s balance in a SIMPLE IRA established under this SIMPLE IRA plan to another IRA without
cost or penalty to the participant.

Name of designated financial institution By: Signature Date

Address Name and title
Form 5305-SIMPLE (Rev. 3-2012)

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Form 5305-SIMPLE (Rev. 3-2012) Page 3

Model Notification to Eligible Employees

I. Opportunity to Participate in the SIMPLE IRA Plan

You are eligible to make salary reduction contributions to the SIMPLE
IRA plan. This notice and the attached summary description provide you with information that you should consider before you
decide whether to start, continue, or change your salary reduction agreement.

II. Employer Contribution Election

For the calendar year, the Employer elects to contribute to your SIMPLE IRA (employer must select either (1), (2), or (3)):
(1) A matching contribution equal to your salary reduction contributions up to a limit of 3% of your compensation for the
year;
(2) A matching contribution equal to your salary reduction contributions up to a limit of % (employer must insert a
number from 1 to 3 and is subject to certain restrictions) of your compensation for the year; or
(3) A nonelective contribution equal to 2% of your compensation for the year (limited to compensation of $250,000*) if you
are an employee who makes at least $ (employer must insert an amount that is $5,000 or less) in
compensation for the year.

III. Administrative Procedures

To start or change your salary reduction contributions, you must complete the salary reduction agreement and return it to
(employer should designate a place or
individual) by (employer should insert a date that is not less than 60 days after notice is given).

Model Salary Reduction Agreement
I. Salary Reduction Election

Subject to the requirements of the SIMPLE IRA plan of (name of
employer) I authorize % or $ (which equals % of my current rate of pay) to be withheld from
my pay for each pay period and contributed to my SIMPLE IRA as a salary reduction contribution.

II. Maximum Salary Reduction

I understand that the total amount of my salary reduction contributions in any calendar year cannot exceed the applicable
amount for that year. See instructions.

III. Date Salary Reduction Begins

I understand that my salary reduction contributions will start as soon as permitted under the SIMPLE IRA plan and as soon as
administratively feasible or, if later, . (Fill in the date you want the salary reduction contributions to
begin. The date must be after you sign this agreement.)

IV. Duration of Election

This salary reduction agreement replaces any earlier agreement and will remain in effect as long as I remain an eligible employee
under the SIMPLE IRA plan or until I provide my Employer with a request to end my salary reduction contributions or provide a
new salary reduction agreement as permitted under this SIMPLE IRA plan.

Signature of employee Date

* This is the amount for 2012. For later years, the limit may be increased for cost-of-living adjustments. The IRS announces the increase, if any, in a news release, in
the Internal Revenue Bulletin, and on the IRS website at IRS.gov.
Form 5305-SIMPLE (Rev. 3-2012)

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Form 5305-SIMPLE (Rev. 3-2012) Page 4
General Instructions these employees are excluded from income from you that is income from
participating in the SIMPLE IRA plan. sources within the United States to be
Section references are to the Internal If the failure to continue to satisfy the eligible under this plan; or
Revenue Code unless otherwise noted. 100-employee limit or the one-plan rule 3. You want to establish a SIMPLE
Purpose of Form described in 1 or 2 above is due to an 401(k) plan.
acquisition or similar transaction
Form 5305-SIMPLE is a model Savings involving your business, special rules Completing Form
Incentive Match Plan for Employees of apply. Consult your tax advisor to find 5305-SIMPLE
Small Employers (SIMPLE) plan out if you can still maintain the plan after
document that an employer may use in the transaction. Pages 1 and 2 of Form 5305-SIMPLE
contain the operative provisions of your
combination with SIMPLE IRAs to Certain related employers (trades or SIMPLE IRA plan. This SIMPLE IRA plan
establish a SIMPLE IRA plan described businesses under common control) must is considered adopted when you have
in section 408(p). be treated as a single employer for completed all appropriate boxes and
These instructions are designed to purposes of the SIMPLE requirements. blanks and it has been executed by you
assist in the establishment and These are: and the designated financial institution.
administration of the SIMPLE IRA plan. (1) a controlled group of corporations The SIMPLE IRA plan is a legal
They are not intended to supersede any under section 414(b); document with important tax
provision in the SIMPLE IRA plan.
Do not file Form 5305-SIMPLE with (2) a partnership or sole proprietorship consequences for you and your
the IRS. Instead, keep it with your under common control under section employees. You may want to consult
records. 414(c); or with your attorney or tax advisor before
adopting this plan.
For more information, see Pub. 560, (3) an affiliated service group under
Retirement Plans for Small Business section 414(m). In addition, if you have Employee Eligibility
(SEP, SIMPLE, and Qualified Plans), and leased employees required to be treated
Pub. 590, Individual Retirement as your own employees under the rules Requirements (Article I)
Arrangements (IRAs). of section 414(n), then you must count Each year for which this SIMPLE IRA plan
all such leased employees for the is effective, you must permit salary
Note. If you used the March 2002, August requirements listed above. reduction contributions to be made by all
2005, or September 2008 version of Form of your employees who are reasonably
5305-SIMPLE to establish a model What Is a SIMPLE IRA Plan? expected to receive at least $5,000 in
Savings Incentive Match Plan, you are not A SIMPLE IRA plan is a written compensation from you during the year,
required to use this version of the form. arrangement that provides you and your and who received at least $5,000 in
employees with an easy way to make compensation from you in any 2
Instructions for the contributions to provide retirement preceding years. However, you can
Employer income for your employees. Under a expand the group of employees who are
SIMPLE IRA plan, employees may eligible to participate in the SIMPLE IRA
Which Employers May choose whether to make salary plan by completing the options provided
Establish and Maintain a reduction contributions to the SIMPLE in Article I, items 1a and 1b. To choose
IRA plan rather than receiving these full eligibility, check the box in Article I,
SIMPLE IRA Plan? amounts as part of their regular item 1a. Alternatively, to choose limited
To establish and maintain a SIMPLE IRA compensation. In addition, you will eligibility, check the box in Article I, item
plan, you must meet both of the contribute matching or nonelective 1b, and then insert “$5,000” or a lower
following requirements: contributions on behalf of eligible compensation amount (including zero)
employees (see Employee Eligibility and “2” or a lower number of years of
1. Last calendar year, you had no Requirements below and Contributions service in the blanks in (i) and (ii) of Article
more than 100 employees (including later). All contributions under this plan I, item 1b.
self-employed individuals) who earned will be deposited into a SIMPLE In addition, you can exclude from
$5,000 or more in compensation from individual retirement account or annuity participation those employees covered
you during the year. If you have a established for each eligible employee under a collective bargaining agreement
SIMPLE IRA plan but later exceed this with the designated financial institution for which retirement benefits were the
100-employee limit, you will be treated named in Article VII. subject of good faith bargaining. You
as meeting the limit for the 2 years
may do this by checking the box in
following the calendar year in which you When To Use Form Article I, item 2. Under certain
last satisfied the limit.
5305-SIMPLE circumstances, these employees must
2. You do not maintain during any part be excluded. See Which Employers May
of the calendar year another qualified A SIMPLE IRA plan may be established Establish and Maintain a SIMPLE IRA
plan with respect to which contributions by using this Model Form or any other Plan? earlier.
are made, or benefits are accrued, for document that satisfies the statutory
service in the calendar year. For this requirements. Salary Reduction
purpose, a qualified plan (defined in Do not use Form 5305-SIMPLE if: Agreements (Article II)
section 219(g)(5)) includes a qualified 1. You want to permit each of your As indicated in Article II, item 1, a salary
pension plan, a profit-sharing plan, a eligible employees to choose a financial reduction agreement permits an eligible
stock bonus plan, a qualified annuity institution that will initially receive employee to make an election to have
plan, a tax-sheltered annuity plan, and a contributions. Instead, use Form his or her compensation for each pay
simplified employee pension (SEP) plan. 5304-SIMPLE, Savings Incentive Match period reduced by a percentage
A qualified plan that only covers Plan for Employees of Small Employers (expressed as a percentage or dollar
employees covered under a collective (SIMPLE)—Not for Use With a amount). The total amount of the
bargaining agreement for which Designated Financial Institution; reduction in the employee’s
retirement benefits were the subject of
good faith bargaining is disregarded if 2. You want employees who are compensation cannot exceed the
nonresident aliens receiving no earned

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Form 5305-SIMPLE (Rev. 3-2012) Page 5

applicable amount for any calendar year. Matching Contributions Additional Information
The applicable amount is $11,500 for
2012. After 2012, the $11,500 amount In general, you must contribute a
may be increased for cost-of-living matching contribution to each eligible Timing of Salary Reduction
adjustments. In the case of an eligible employee’s SIMPLE IRA equal to the Contributions
employee who is 50 or older by the end employee’s salary reduction
of the calendar year, the above limitation contributions. This matching contribution The employer must make the salary
is increased by $2,500 for 2012. After cannot exceed 3% of the employee’s reduction contributions to the
2012, the $2,500 amount may be compensation. See Definition of designated financial institution for the
increased for cost-of-living adjustments. Compensation later . SIMPLE IRAs of all eligible employees
no later than the 30th day of the month
You may reduce this 3% limit to a following the month in which the
Timing of Salary Reduction lower percentage, but not lower than amounts would otherwise have been
Elections 1%. You cannot lower the 3% limit for payable to the employee in cash.
For a calendar year, an eligible employee more than 2 calendar years out of the
may make or modify a salary reduction 5-year period ending with the calendar The Department of Labor has
election during the 60-day period year the reduction is effective. indicated that most SIMPLE IRA plans
are also subject to Title I of the
immediately preceding January 1 of that Note. If any year in the 5-year period Employee Retirement Income Security
year. However, for the year in which the described above is a year before you Act of 1974 (ERISA). Under Department
employee becomes eligible to make first established any SIMPLE IRA plan, of Labor regulations, at 29 CFR
salary reduction contributions, the period you will be treated as making a 3% 2510.3-102, salary reduction
during which the employee may make or matching contribution for that year for contributions must be made to the
modify the election is a 60-day period purposes of determining when you may SIMPLE IRA at the designated financial
that includes either the date the reduce the employer matching institution as of the earliest date on
employee becomes eligible or the day contribution. which those contributions can
before. To elect this option, you must notify reasonably be segregated from the
You can extend the 60-day election the employees of the reduced limit within employer’s general assets, but in no
periods to provide additional a reasonable period of time before the event later than the 30-day deadline
opportunities for eligible employees to applicable 60-day election periods for described previously.
make or modify salary reduction the year. See Timing of Salary Reduction
elections using the blank in Article II, Elections earlier. Definition of Compensation
item 2b. For example, you can provide “Compensation” means the amount
that eligible employees may make new Nonelective Contributions
described in section 6051(a)(3) (wages,
salary reduction elections or modify prior Instead of making a matching tips, and other compensation from the
elections for any calendar quarter during contribution, you may, for any year, employer subject to federal income tax
the 30 days before that quarter. make a nonelective contribution equal to withholding under section 3401(a)), and
You may use the Model Salary 2% of compensation for each eligible amounts paid for domestic service in a
Reduction Agreement on page 3 to employee who has at least $5,000 in private home, local college club, or local
enable eligible employees to make or compensation for the year. Nonelective chapter of a college fraternity or sorority.
modify salary reduction elections. contributions may not be based on more Usually, this is the amount shown in box
than $250,000* of compensation.
Employees must be permitted to 1 of Form W-2, Wage and Tax
terminate their salary reduction elections To elect to make nonelective Statement. For further information, see
at any time. They may resume salary contributions, you must notify employees Pub. 15, Circular E, Employer’s Tax
reduction contributions for the year if within a reasonable period of time before Guide. Compensation also includes the
permitted under Article II, item 2b. the applicable 60-day election periods salary reduction contributions made
However, by checking the box in Article for such year. See Timing of Salary under this plan, and, if applicable,
II, item 2d, you may prohibit an Reduction Elections earlier. compensation deferred under a section
457 plan. In determining an employee’s
employee who terminates a salary Note. Insert “$5,000” in Article III, item compensation for prior years, the
reduction election outside the normal 2b(i) to impose the $5,000 compensation employee’s elective deferrals under a
election cycle from resuming salary requirement. You may expand the group section 401(k) plan, a SARSEP, or a
reduction contributions during the of employees who are eligible for section 403(b) annuity contract are also
remainder of the calendar year. nonelective contributions by inserting a included in the employee’s
compensation amount lower than compensation.
Contributions (Article III) $5,000.
Only contributions described below may For self-employed individuals,
be made to this SIMPLE IRA plan. No Effective Date (Article VII) compensation means the net earnings
from self-employment determined under
additional contributions may be made. Insert in Article VII the date you want the section 1402(a), without regard to
Salary Reduction Contributions provisions of the SIMPLE IRA plan to section 1402(c)(6), prior to subtracting
become effective. You must insert any contributions made pursuant to this
As indicated in Article III, item 1, salary January 1 of the applicable year unless SIMPLE IRA plan on behalf of the
reduction contributions consist of the this is the first year for which you are individual.
amount by which the employee agrees adopting any SIMPLE IRA plan. If this is
to reduce his or her compensation. You the first year for which you are adopting
must contribute the salary reduction a SIMPLE IRA plan, you may insert any
contributions to the designated financial date between January 1 and October 1,
institution for the employee’s SIMPLE inclusive of the applicable year.
IRA.

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Form 5305-SIMPLE (Rev. 3-2012) Page 6
Employee Notification Contributions will be treated as made procedures for withdrawals and transfers
for a particular tax year if they are made from the SIMPLE IRAs established under
You must notify eligible employees prior for that year and are made by the due this SIMPLE IRA plan. The summary
to the employees’ 60-day election period date (including extensions) of your description must be received by the
described previously that they can make income tax return for that year. employer in sufficient time to comply
or change salary reduction elections. In with the Employee Notification
this notification, you must indicate Choosing the Designated requirements on this page.
whether you will provide: Financial Institution If you fail to provide the summary
1. A matching contribution equal to description described above, you will be
your employees’ salary reduction As indicated in Article V, item 4, a
contributions up to a limit of 3% of their designated financial institution is a liable for a penalty of $50 per day until
compensation; trustee, custodian, or insurance the notification is provided. If you can
company (that issues annuity contracts) show that the failure was due to
2. A matching contribution equal to for the SIMPLE IRA plan that would reasonable cause, the penalty will not be
your employees’ salary reduction receive all contributions made pursuant imposed.
contributions subject to a percentage to the SIMPLE IRA plan and deposit the
limit that is between 1 and 3% of their contributions to the SIMPLE IRA of each Paperwork Reduction Act Notice. You
compensation; or eligible employee. are not required to provide the
3. A nonelective contribution equal to Only certain financial institutions, such information requested on a form that is
2% of your employees’ compensation. as banks, savings and loan associations, subject to the Paperwork Reduction Act
You can use the Model Notification to insured credit unions, insurance unless the form displays a valid OMB
Eligible Employees to satisfy these companies (that issue annuity contracts), control number. Books or records
employee notification requirements for or IRS-approved nonbank trustees may relating to a form or its instructions must
this SIMPLE IRA plan. A Summary serve as a designated financial institution be retained as long as their contents
Description must also be provided to under a SIMPLE IRA plan. may become material in the
administration of any Internal Revenue
eligible employees at this time. This You are not required to choose a law. Generally, tax returns and return
summary description requirement may designated financial institution for your information are confidential, as required
be satisfied by providing a completed SIMPLE IRA plan. However, if you do not by section 6103.
copy of pages 1 and 2 of Form want to choose a designated financial
5305-SIMPLE (including the Article VI institution, you cannot use this form (see The time needed to complete this
Procedures for Withdrawals and When To Use Form 5305-SIMPLE form will vary depending on individual
Transfers from the SIMPLE IRAs earlier). circumstances. The estimated average
established under this SIMPLE IRA plan). time is:
If you fail to provide the employee Instructions for the Recordkeeping . . . . 3 hr., 38 min.
notification (including the summary Designated Financial Learning about the
description) described above, you will be law or the form . . . . 2 hr., 26 min.
liable for a penalty of $50 per day until Institution
the notification is provided. If you can Preparing the form . . . . 47 min.
show that the failure was due to Completing Form If you have comments concerning the
reasonable cause, the penalty will not be 5305-SIMPLE accuracy of these time estimates or
imposed. suggestions for making this form
By completing Article VII, you have simpler, we would be happy to hear
Reporting Requirements agreed to be the designated financial from you. You can write to the Internal
institution for this SIMPLE IRA plan. You Revenue Service, Tax Products
You are not required to file any annual agree to maintain IRAs on behalf of all Coordinating Committee,
information returns for your SIMPLE IRA individuals receiving contributions under SE:W:CAR:MP:T:M:S, 1111 Constitution
plan, such as Form 5500, Annual the plan and to receive all contributions Ave. NW, IR-6526, Washington, DC
Return/Report of Employee Benefit Plan made pursuant to this plan and to 20224. Do not send this form to this
or Form 5500-EZ, Annual Return of deposit those contributions to the address. Instead, keep it for your
One-Participant (Owners and Their SIMPLE IRAs of each eligible employee records.
Spouses) Retirement Plan. However, you as soon as practicable. You also agree
must report to the IRS which eligible that upon the request of a participant,
employees are active participants in the you will transfer the participant’s balance
SIMPLE IRA plan and the amount of in a SIMPLE IRA to another IRA without
your employees’ salary reduction cost or penalty to the participant.
contributions to the SIMPLE IRA plan on
Form W-2. These contributions are Summary Description
subject to social security, Medicare,
railroad retirement, and federal Each year the SIMPLE IRA plan is in
unemployment tax. effect, you must provide the employer
the information described in section
Deducting Contributions 408(l)(2)(B). This requirement may be
satisfied by providing the employer a
Contributions to this SIMPLE IRA plan current copy of Form 5305-SIMPLE
are deductible in your tax year (including instructions) together with your
containing the end of the calendar year
for which the contributions are made.

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