Form 5304-SIMPLE Savings Incentive Match Plan for
OMB No. 1545-1502
Do not file
(Rev. September 2008) Employees of Small Employers (SIMPLE)—Not with the Internal
Department of the Treasury
Internal Revenue Service for Use With a Designated Financial Institution 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 IRA established by 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 the 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.
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 (for example, 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.
2 a 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 $230,000* 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) for each eligible employee to the SIMPLE IRA established at the financial
institution selected by that employee 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) for each eligible employee to the
SIMPLE IRA established at the financial institution selected by that employee 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 2008. 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 www.irs.gov.
For Paperwork Reduction Act Notice, see page 6. Cat. No. 23377W Form 5304-SIMPLE (Rev. 9-2008)
Form 5304-SIMPLE (Rev. 9-2008) 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 Selection of IRA Trustee. The Employer must permit each eligible employee to select the financial institution that will serve as the trustee,
custodian, or issuer of the SIMPLE IRA to which the Employer will make all contributions on behalf of that employee.
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 under 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 the 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 SIMPLE IRA. A SIMPLE IRA is an individual retirement account described in section 408(a), or an individual retirement annuity described
in section 408(b), to which the only contributions that can be made are contributions under a SIMPLE IRA plan and rollovers or transfers
from another SIMPLE IRA.
Article VI—Procedures for Withdrawal (The Employer will provide each employee with the procedures for
withdrawals of contributions received by the financial institution selected by that employee, and that financial
institution’s name and address (by attaching that information or inserting it in the space below) unless: (1) that
financial institution’s procedures are unavailable, or (2) that financial institution provides the procedures directly to
the employee. See Employee Notification on page 5.)
Article VII—Effective Date
This SIMPLE IRA plan is effective . See
instructions.
* * * * *
Name of Employer By: Signature Date
Address of Employer Name and title
Form 5304-SIMPLE (Rev. 9-2008)
Form 5304-SIMPLE (Rev. 9-2008) 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 $230,000*) 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).
IV. Employee Selection of Financial Institution
You must select the financial institution that will serve as the trustee, custodian, or issuer of your SIMPLE IRA and notify your Employer
of your selection.
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. Employee Selection of Financial Institution
I select the following financial institution to serve as the trustee, custodian, or issuer of my SIMPLE IRA.
Name of financial institution
Address of financial institution
SIMPLE IRA account name and number
I understand that I must establish a SIMPLE IRA to receive any contributions made on my behalf under this SIMPLE IRA plan. If the
information regarding my SIMPLE IRA is incomplete when I first submit my salary reduction agreement, I realize that it must be
completed by the date contributions must be made under the SIMPLE IRA plan. If I fail to update my agreement to provide this
information by that date, I understand that my Employer may select a financial institution for my SIMPLE IRA.
V. 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 2008. 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 www.irs.gov.
Form 5304-SIMPLE (Rev. 9-2008)
Form 5304-SIMPLE (Rev. 9-2008) Page 4
General Instructions participating in the SIMPLE IRA plan. If 2. You want employees who are
the failure to continue to satisfy the nonresident aliens receiving no earned
Section references are to the Internal 100-employee limit or the one-plan rule income from you that constitutes income
Revenue Code unless otherwise noted. described in 1 and 2 above is due to an from sources within the United States to
acquisition or similar transaction be eligible under this plan; or
Purpose of Form involving your business, special rules
Form 5304-SIMPLE is a model Savings 3. You want to establish a SIMPLE
apply. Consult your tax advisor to find 401(k) plan.
Incentive Match Plan for Employees of out if you can still maintain the plan after
Small Employers (SIMPLE) plan the transaction.
document that an employer may use to Completing Form
Certain related employers (trades or 5304-SIMPLE
establish a SIMPLE IRA plan described
businesses under common control) must
in section 408(p), under which each Pages 1 and 2 of Form 5304-SIMPLE
be treated as a single employer for
eligible employee is permitted to select contain the operative provisions of your
purposes of the SIMPLE IRA
the financial institution for his or her SIMPLE IRA plan. This SIMPLE IRA plan
requirements. These are: (1) a controlled
SIMPLE IRA. is considered adopted when you have
group of corporations under section
These instructions are designed to 414(b); (2) a partnership or sole completed all applicable boxes and
assist in the establishment and proprietorship under common control blanks and it has been executed by you.
administration of the SIMPLE IRA plan. under section 414(c); or (3) an affiliated The SIMPLE IRA plan is a legal
They are not intended to supersede any service group under section 414(m). In document with important tax
provision in the SIMPLE IRA plan. addition, if you have leased employees consequences for you and your
Do not file Form 5304-SIMPLE with required to be treated as your own employees. You may want to consult
the IRS. Instead, keep it with your employees under the rules of section with your attorney or tax advisor before
records. 414(n), then you must count all such adopting this plan.
For more information, see Pub. 560, leased employees for the requirements
Retirement Plans for Small Business listed above. Employee Eligibility
(SEP, SIMPLE, and Qualified Plans), and Requirements (Article I)
Pub. 590, Individual Retirement What Is a SIMPLE IRA Plan?
Arrangements (IRAs). A SIMPLE IRA plan is a written Each year for which this SIMPLE IRA
arrangement that provides you and your plan is effective, you must permit salary
Note. If you used the March 2002 or reduction contributions to be made by
August 2005 version of Form employees with an easy way to make
contributions to provide retirement all of your employees who are
5304-SIMPLE to establish a model reasonably expected to receive at least
Savings Incentive Match Plan, you are income for your employees. Under a
SIMPLE IRA plan, employees may $5,000 in compensation from you during
not required to use this version of the the year, and who received at least
form. choose whether to make salary
reduction contributions to the SIMPLE $5,000 in compensation from you in any
IRA plan rather than receiving these 2 preceding years. However, you can
Which Employers May expand the group of employees who are
amounts as part of their regular
Establish and Maintain a compensation. In addition, you will eligible to participate in the SIMPLE IRA
SIMPLE IRA Plan? contribute matching or nonelective plan by completing the options provided
contributions on behalf of eligible in Article I, items 1a and 1b. To choose
To establish and maintain a SIMPLE IRA full eligibility, check the box in Article I,
plan, you must meet both of the employees (see Employee Eligibility
Requirements below and Contributions item 1a. Alternatively, to choose limited
following requirements: eligibility, check the box in Article I, item
on page 5). All contributions under this
1. Last calendar year, you had no 1b, and then insert “$5,000” or a lower
plan will be deposited into a SIMPLE
more than 100 employees (including compensation amount (including zero)
individual retirement account or annuity
self-employed individuals) who earned and “2” or a lower number of years of
established for each eligible employee
$5,000 or more in compensation from service in the blanks in (i) and (ii) of
with the financial institution selected by
you during the year. If you have a Article I, item 1b.
him or her.
SIMPLE IRA plan but later exceed this In addition, you can exclude from
100-employee limit, you will be treated
as meeting the limit for the 2 years
When To Use Form participation those employees covered
5304-SIMPLE under a collective bargaining agreement
following the calendar year in which you for which retirement benefits were the
last satisfied the limit. A SIMPLE IRA plan may be established subject of good faith bargaining. You
2. You do not maintain during any part by using this Model Form or any other may do this by checking the box in
of the calendar year another qualified document that satisfies the statutory Article I, item 2. Under certain
plan with respect to which contributions requirements. circumstances, these employees must
are made, or benefits are accrued, for Do not use Form 5304-SIMPLE if: be excluded. See Which Employers May
service in the calendar year. For this Establish and Maintain a SIMPLE IRA
1. You want to require that all SIMPLE
purpose, a qualified plan (defined in Plan? above.
IRA plan contributions initially go to a
section 219(g)(5)) includes a qualified
financial institution designated by you.
pension plan, a profit-sharing plan, a
That is, you do not want to permit each Salary Reduction
stock bonus plan, a qualified annuity Agreements (Article II)
of your eligible employees to choose a
plan, a tax-sheltered annuity plan, and a
financial institution that will initially As indicated in Article II, item 1, a salary
simplified employee pension (SEP) plan.
receive contributions. Instead, use Form reduction agreement permits an eligible
A qualified plan that only covers
5305-SIMPLE, Savings Incentive Match employee to make a salary reduction
employees covered under a collective
Plan for Employees of Small Employers election to have his or her compensation
bargaining agreement for which
(SIMPLE)—for Use With a Designated for each pay period reduced by a
retirement benefits were the subject of
Financial Institution; percentage (expressed as a percentage
good faith bargaining is disregarded if
these employees are excluded from or dollar amount). The total amount of
Form 5304-SIMPLE (Rev. 9-2008) Page 5
the reduction in the employee’s Matching Contributions Additional Information
compensation cannot exceed the
applicable amount for any calendar year. In general, you must contribute a matching
The applicable amount is $10,500 for 2008. contribution to each eligible employee’s Timing of Salary Reduction
After 2008, the $10,500 amount may be SIMPLE IRA equal to the employee’s salary Contributions
increased for cost-of-living adjustments. In reduction contributions. This matching
the case of an eligible employee who is 50 contribution cannot exceed 3% of the The employer must make the salary
or older by the end of the calendar year, employee’s compensation. See Definition reduction contributions to the financial
the above limitation is increased by $2,500 of Compensation, below. institution selected by each eligible
for 2008. After 2008, the $2,500 amount You may reduce this 3% limit to a lower employee for his or her SIMPLE IRA no
may be increased for cost-of-living percentage, but not lower than 1%. You later than the 30th day of the month
adjustments. cannot lower the 3% limit for more than 2 following the month in which the amounts
calendar years out of the 5-year period would otherwise have been payable to the
Timing of Salary Reduction ending with the calendar year the reduction employee in cash.
Elections is effective. The Department of Labor has indicated
Note. If any year in the 5-year period that most SIMPLE IRA plans are also
For any calendar year, an eligible employee subject to Title I of the Employee
may make or modify a salary reduction described above is a year before you first
established any SIMPLE IRA plan, you will Retirement Income Security Act of 1974
election during the 60-day period (ERISA). Under Department of Labor
immediately preceding January 1 of that be treated as making a 3% matching
contribution for that year for purposes of regulations at 29 CFR 2510.3-102, salary
year. However, for the year in which the reduction contributions must be made to
employee becomes eligible to make salary determining when you may reduce the
employer matching contribution. each participant’s SIMPLE IRA as of the
reduction contributions, the period during earliest date on which those contributions
which the employee may make or modify To elect this option, you must notify the can reasonably be segregated from the
the election is a 60-day period that employees of the reduced limit within a employer’s general assets, but in no event
includes either the date the employee reasonable period of time before the later than the 30-day deadline described
becomes eligible or the day before. applicable 60-day election periods for the previously.
You can extend the 60-day election year. See Timing of Salary Reduction
Elections above.
periods to provide additional opportunities Definition of Compensation
for eligible employees to make or modify Nonelective Contributions
salary reduction elections using the blank “Compensation” means the amount
in Article II, item 2b. For example, you can Instead of making a matching contribution, described in section 6051(a)(3) (wages, tips,
provide that eligible employees may make you may, for any year, make a nonelective and other compensation from the employer
new salary reduction elections or modify contribution equal to 2% of compensation subject to federal income tax withholding
prior elections for any calendar quarter for each eligible employee who has at least under section 3401(a)), and amounts paid
during the 30 days before that quarter. $5,000 in compensation for the year. for domestic service in a private home,
Nonelective contributions may not be local college club, or local chapter of a
You may use the Model Salary college fraternity or sorority. Usually, this is
based on more than $230,000* of
Reduction Agreement on page 3 to enable the amount shown in box 1 of Form W-2,
compensation.
eligible employees to make or modify Wage and Tax Statement. For further
salary reduction elections. To elect to make nonelective
information, see Pub. 15, Circular E,
Employees must be permitted to contributions, you must notify employees
Employer’s Tax Guide. Compensation also
terminate their salary reduction elections at within a reasonable period of time before
includes the salary reduction contributions
any time. They may resume salary the applicable 60-day election periods for
made under this plan, and, if applicable,
reduction contributions for the year if such year. See Timing of Salary Reduction
compensation deferred under a section 457
permitted under Article II, item 2b. Elections above.
plan. In determining an employee’s
However, by checking the box in Article II, Note. Insert “$5,000” in Article III, item compensation for prior years, the
item 2d, you may prohibit an employee 2b(i) to impose the $5,000 compensation employee’s elective deferrals under a
who terminates a salary reduction election requirement. You may expand the group of section 401(k) plan, a SARSEP, or a section
outside the normal election cycle from employees who are eligible for nonelective 403(b) annuity contract are also included in
resuming salary reduction contributions contributions by inserting a compensation the employee’s compensation.
during the remainder of the calendar year. amount lower than $5,000.
For self-employed individuals,
compensation means the net earnings
Contributions (Article III) Effective Date (Article VII) from self-employment determined under
Only contributions described below may be section 1402(a), without regard to section
Insert in Article VII the date you want the
made to this SIMPLE IRA plan. No 1402(c)(6), prior to subtracting any
provisions of the SIMPLE IRA plan to
additional contributions may be made. contributions made pursuant to this
become effective. You must insert January
SIMPLE IRA plan on behalf of the
1 of the applicable year unless this is the
Salary Reduction Contributions first year for which you are adopting any
individual.
As indicated in Article III, item 1, salary SIMPLE IRA plan. If this is the first year for
reduction contributions consist of the which you are adopting a SIMPLE IRA Employee Notification
amount by which the employee agrees to plan, you may insert any date between You must notify each eligible employee
reduce his or her compensation. You must January 1 and October 1, inclusive of the prior to the employee’s 60-day election
contribute the salary reduction applicable year. period described above that he or she can
contributions to the financial institution make or change salary reduction elections
selected by each eligible employee. and select the financial institution that will
serve as the trustee, custodian, or
*This is the amount for 2008. 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 website at www.irs.gov.
Form 5304-SIMPLE (Rev. 9-2008) Page 6
issuer of the employee’s SIMPLE IRA. In Reporting Requirements There is a penalty of $50 per day
this notification, you must indicate imposed on the financial institution for
whether you will provide: You are not required to file any annual each failure to provide the summary
information returns for your SIMPLE IRA description described above. However, if
1. A matching contribution equal to plan, such as Form 5500, Annual the failure was due to reasonable cause,
your employees’ salary reduction Return/Report of Employee Benefit Plan, the penalty will not be imposed.
contributions up to a limit of 3% of their or Form 5500-EZ, Annual Return of
compensation; One-Participant (Owners and Their
2. A matching contribution equal to Spouses) Retirement Plan. However, you Paperwork Reduction Act Notice. You
your employees’ salary reduction must report to the IRS which eligible are not required to provide the
contributions subject to a percentage employees are active participants in the information requested on a form that is
limit that is between 1 and 3% of their SIMPLE IRA plan and the amount of subject to the Paperwork Reduction Act
compensation; or your employees’ salary reduction unless the form displays a valid OMB
3. A nonelective contribution equal to contributions to the SIMPLE IRA plan on control number. Books or records
2% of your employees’ compensation. Form W-2. These contributions are relating to a form or its instructions must
subject to social security, Medicare, be retained as long as their contents
You can use the Model Notification to railroad retirement, and federal may become material in the
Eligible Employees on page 3 to satisfy unemployment tax. administration of any Internal Revenue
these employee notification requirements
law. Generally, tax returns and return
for this SIMPLE IRA plan. A Summary Deducting Contributions information are confidential, as required
Description must also be provided to
Contributions to this SIMPLE IRA plan by section 6103.
eligible employees at this time. This
summary description requirement may are deductible in your tax year The time needed to complete this
be satisfied by providing a completed containing the end of the calendar year form will vary depending on individual
copy of pages 1 and 2 of Form for which the contributions are made. circumstances. The estimated average
5304-SIMPLE (including the information Contributions will be treated as made time is:
described in Article VI—Procedures for for a particular tax year if they are made Recordkeeping 3 hr., 38 min.
Withdrawal). for that year and are made by the due Learning about the
If you fail to provide the employee date (including extensions) of your law or the form 2 hr., 26 min.
notification (including the summary income tax return for that year.
Preparing the form 47 min.
description) described above, you will be
liable for a penalty of $50 per day until
Summary Description If you have comments concerning the
the notification is provided. If you can Each year the SIMPLE IRA plan is in accuracy of these time estimates or
show that the failure was due to effect, the financial institution for the suggestions for making this form
reasonable cause, the penalty will not be SIMPLE IRA of each eligible employee simpler, we would be happy to hear
imposed. must provide the employer the from you. You can write to the Internal
information described in section Revenue Service, Tax Products
If the financial institution’s name, Coordinating Committee,
address, or withdrawal procedures are 408(l)(2)(B). This requirement may be
satisfied by providing the employer a SE:W:CAR:MP:T:T:SP, 1111 Constitution
not available at the time the employee Ave. NW, IR-6526, Washington, DC
must be given the summary description, current copy of Form 5304-SIMPLE
(including instructions) together with the 20224. Do not send this form to this
you must provide the summary address. Instead, keep it with your
description without this information. In financial institution’s procedures for
withdrawals from SIMPLE IRAs records.
that case, you will have reasonable
cause for not including this information established at that financial institution,
in the summary description, but only if including the financial institution’s name
you ensure that it is provided to the and address. The summary description
employee as soon as administratively must be received by the employer in
feasible. sufficient time to comply with the
Employee Notification requirements
earlier.