Small Business Retirement Accounts

Simplified Employee Pension (SEP)

Simplified Employee Pension img

Any employer may establish a SEP plan.

  • May be established up to the tax-filing due date, including extensions
  • Tax-deductible contributions are made by the employer on behalf of all eligible employees, and if self-employed, their own retirement
  • All employees age 21 or older who have worked in at least three of the preceding five years receive a contribution
  • Contributions are limited to 25% of compensation or $53,000
  • Contributions are made directly to an employee's IRA
  • General rules regarding Traditional IRAs apply

Savings Incentive Match Plan for Employees (SIMPLE)

Savings Incentive Match Plan for Employees img

Available to any employer with no more than 100 qualified employees not currently participating in a qualified plan.

  • Contributions made to each of the eligible employees who earned at least $5,000 during any two preceding calendar years and expects him/her to earn $5,000 in the current year
  • Either a matching contribution or a non-elective contribution is made
  • Employees may defer up to $12,500 each year
  • Distributions subject to same rules as Traditional IRAs
  • Contributions made directly to an employee's IRA

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