Retirement News for Employers - Fall 2011 - We're Glad You Asked!
Do SEP and SIMPLE IRA plans have the same contribution limits as regular IRAs?
No, contributions to SEP and SIMPLE IRA plans aren't subject to the same limits that apply to an individual’s traditional or Roth IRA.
SIMPLE IRA Contributions
A SIMPLE IRA may only accept the following types of contributions:
- employee salary deferrals;
- the employer’s contributions (matching or nonelective);and
- rollovers from another SIMPLE IRA.
Only employers may contribute to a SEP plan, and these contributions are held in employees’ SEP-IRAs. However, if the SEP-IRA document permits (and most do), you can make regular IRA contributions to your SEP-IRA up to the maximum annual IRA contribution limit.
If you’re covered by a SEP or SIMPLE IRA plan (see Are You Covered by an Employer's Retirement Plan?), it may affect the amount you or your spouse may deduct for your contributions to a traditional IRA.
- IRA Resources
- Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
- Publication 590, Individual Retirement Arrangements (IRAs)