Learn about SIMPLE IRA participant and employer contributions, deadlines, limits and more.
Contribution type |
Employers with 25 or fewer employees |
Employers with 26-100 employees |
|---|---|---|
Salary deferral contributions |
2024: $17,600 or 100% of participant compensation, whichever is less 2025: $17,600 or 100% of participant compensation, whichever is less |
2024: $16,000 or $17,600 if higher employer contributions are made1 or 100% of participant compensation, whichever is less 2025: $16,500 or $17,600 if higher employer contributions are made1 or 100% of participant compensation, whichever is less |
Additional catch-up salary deferral contribution — participants age 50–59 — if permitted by the plan |
2024: $3,850 2025: $3,850 |
2024: $3,500 or $3,850 if higher employer contributions are made1 2025: $3,500 or $3,850 if higher employer contributions are made1 |
Additional catch-up salary deferral contribution — participants age 60–632 — if permitted by the plan |
2024: N/A 2025: $5,250 |
2024: N/A 2025: $5,250 |
Additional catch-up salary deferral contribution — participants age 64 or older — if permitted by the plan |
2024: $3,850 2025: $3,850 |
2024: $3,500 or $3,850 if higher employer contributions are made1 2025: $3,500 or $3,850 if higher employer contributions are made1 |
1 For employers with 26-100 employees (who earned at least $5,000 in the prior year) who elect to increase their matching contributions to 4% or nonelective contributions to 3%, the higher employee contribution limit and catch-up limit apply.
2 Effective January 1, 2025, the SECURE 2.0 Act allows higher catch-up salary deferral contributions for employees age 60-63.
Yes, if the plan offers Roth salary deferral contributions. During enrollment, participants may use the SIMPLE IRA Salary Deferral Election form to elect salary deferral contributions.
The plan sponsor can elect to offer Roth salary deferral contributions during the plan’s establishment or add the option after the plan is established by amending the existing plan, prior to the enrollment period for the following year.
Note: Participants who elect Roth salary deferral contributions will have both a Capital Bank and Trust Company (CB&T) SIMPLE IRA and a CB&T Roth SIMPLE IRA established.
Eligible employees can enter or modify an existing SIMPLE IRA Salary Deferral Election form during the 60-day enrollment period and at other intervals if elected in the adoption agreement.
To make changes to the participant’s fund allocations for future contributions, call us at (800) 421-4225, ext. 39 for assistance. To reallocate the existing funds in their account, an exchange or rebalance can be processed online, by phone or by mail.
Plans with fewer than 100 participants can follow a voluntary safe harbor rule that allows them to meet the plan asset rules if they deposit participant contributions within 7 business days of being withheld. If employers don’t meet the safe harbor standard, then they must comply by the earlier of the following 2 events when remitting deferrals:
The minimum deferral amount is $25 per fund.
Yes, participants can make both pretax and Roth salary deferral contributions if the SIMPLE IRA plan offers Roth salary deferral contributions and the participant elects both contribution types on their SIMPLE IRA Salary Deferral Election form.
Note: The maximum annual salary deferral contribution limit applies across both pretax and Roth deferrals.
No, SIMPLE IRAs allow for only salary deferral and employer contributions.
Yes, contributions cannot be made into the following:
Yes, eligibility for the nonrefundable Saver’s Credit is based on the participant’s filing status and modified adjusted gross income (MAGI).
The credit rate available is based on the participant’s MAGI and is between 10% and 50% of the contribution. In 2024 and 2025, the maximum credit allowed is $1,000 ($2,000 if married filing jointly). Refer to Retirement Savings Contributions Credit (Saver’s Credit) for more information.
No, but once they’ve met the 2-year requirement, they can transfer the assets to a traditional IRA and continue to save for retirement.
Form 5498 is mailed by May 31, after the tax-filing deadline. Investors are not required to file Form 5498 with their tax return. If your client needs documentation of their current tax year’s contributions for their tax advisor, it can be found under the Transaction History section of the advisor website. Investors can also access their transaction history by logging in to their account on the investor website.
The employer may choose to make an annual 3% dollar-for-dollar match or a 2% nonelective contribution. (The matching contributions may be reduced to a minimum of 1% for 2 of every 5 calendar years.) Employers with 26-100 employees who earned at least $5,000 in the prior year may voluntarily allow the higher salary deferral limits (refer to What are the current salary deferral contribution limits? for more details) by providing increased employer contributions of either a dollar-for-dollar match up to 4% of compensation or 3% nonelective contributions. The percentage of mandatory employer nonelective contributions is applied on up to $350,000 of compensation for 2025. Therefore, the maximum mandatory nonelective employer contribution amount per employee for 2025 is $7,000 at 2% or $10,500 at 3%.
Above the mandatory contributions, employers can make optional nonelective contributions to each eligible employee in a uniform percentage up to 10% of compensation, not to exceed $5,100.
Employer contributions for the current tax year must be made by the employer’s tax-filing deadline, including extensions.
No, CB&T SIMPLE IRA plans do not accept Roth employer contributions.
Employers are required to make contributions via Automated Clearing House. When the plan is established, login information and instructions on how to make contributions using the Online Group Investments (OGI) website are emailed to the employer and plan contact.
For additional information on the OGI website and to learn how to get a plan started using OGI, visit Online Group Investments (OGI) for plan sponsors.
Yes, employers must make matching or nonelective contributions to all eligible participants each year, regardless of their profitability. Employers must include eligible participants who:
SIMPLE IRAs are subject to contribution limits and an employer contribution allocation formula. Contributions that exceed these limits or do not follow the allocation formula can result in excess contributions. Excess contributions may be subject to taxes and penalties. Review SIMPLE IRA tax information for more information.
To remove an excess contribution, complete the Distribution Request for Excess Contributions From SIMPLE IRAs. Excess contributions may be subject to taxes and penalties. Review SIMPLE IRA tax information for more information.
No, a SIMPLE IRA contribution is not permitted to be recharacterized to a traditional IRA contribution.
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