Setting up a new SIMPLE IRA for employees collecting unemployment benefit

Submitted by Keith Kim on Fri, 2020-09-04 04:46

Hello,
I have a client who has an employee currently, hopefully temporarily collecting unemployment payment scheduled till the end of October. He has already made through January through March over $5000.
the company is setting up either a SIMPLE IRA possibly with non-elective employer contribution.
Does the group have to enroll him if the employee has already met eligibility?
In other words, must/can a new account set up for the employee?

Thank you!



Submitted by William Tuttle on Fri, 2020-09-04 13:48

  • Every employee who meets the SIMPLE IRA plan’s eligibility requirements at any time during a calendar year must; be enrolled in the plan, have an account set up and have employer contributions made based on their full year’s compensation.
  • This true for employees who quit, retire, are laid off/fired or even die. Receiving unemployment benefits are irrelevant.
  • See IRS Notice 98-4.


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