SIMPLE-IRA for 2-person law partnership
Is it permissible for only 1 partner to receive contributions to their SIMPLE-IRA if
the second partner does not?
Is it permissible for only 1 partner to receive contributions to their SIMPLE-IRA if
the second partner does not?
Permalink Submitted by Alan - IRA critic on Wed, 2019-11-06 04:20
Yes. Simple IRA contributions are elective deferrals, so one partner is able to decline making contributions while the other does not.
Permalink Submitted by David Mertz on Wed, 2019-11-06 12:19
SIMPLE IRA plans also have an employer contribution component. Just make sure that the employer contribution for the SIMPLE IRA plan is an employer matching contribution rather than the alternative of a fixed 2%-of-compensation nonelective contribution, otherwise an employer contribution would be required for the partner whose elective deferral is $0 (assuming that that partner meets the eligibility requirements to participate in the SIMPLE plan).