Fill - Free fillable Form 5304-SIMPLE Savings Incentive Match Plan PDF form

Form 5304-SIMPLE

(Rev. March 2012)

Department of the Treasury

Internal Revenue Service

Savings Incentive Match Plan

for Employees of Small Employers (SIMPLE)—Not

for Use With a Designated Financial Institution

OMB No. 1545-1502

Do not file

with the Internal

Revenue Service

Name of Employer

establishes the following SIMPLE

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)

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):

Full Eligibility. All employees are eligible.

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)

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

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.

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.

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)

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 $250,000* 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

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.

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 2012. 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 IRS.gov.

For Paperwork Reduction Act Notice, see the instructions.

Cat. No. 23377W

Form

5304-SIMPLE (Rev. 3-2012)

Form 5304-SIMPLE (Rev. 3-2012)

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.

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.

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.

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.

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

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)).

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.

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.

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 Withdrawals (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 in the instructions.)

Article VII—Effective Date

This SIMPLE IRA plan is effective . See

instructions.

* * * * *

Name of Employer

Address of Employer

By:

Signature

Date

Name and title

Form 5304-SIMPLE (Rev. 3-2012)

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Form 5304-SIMPLE (Rev. 3-2012)

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 compensation of $250,000*) 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 2012. 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

IRS.gov.

Form 5304-SIMPLE (Rev. 3-2012)

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Form 5304-SIMPLE (Rev. 3-2012)

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General Instructions

Section references are to the Internal

Revenue Code unless otherwise noted.

Purpose of Form

Form 5304-SIMPLE is a model Savings

Incentive Match Plan for Employees of

Small Employers (SIMPLE) plan

document that an employer may use to

establish a SIMPLE IRA plan described

in section 408(p), under which each

eligible employee is permitted to select

the financial institution for his or her

SIMPLE IRA.

These instructions are designed to

assist in the establishment and

administration of the SIMPLE IRA plan.

They are not intended to supersede any

provision in the SIMPLE IRA plan.

Do not file Form 5304-SIMPLE with

the IRS. Instead, keep it with your

records.

For more information, see Pub. 560,

Retirement Plans for Small Business

(SEP, SIMPLE, and Qualified Plans), and

Pub. 590, Individual Retirement

Arrangements (IRAs).

Note. If you used the March 2002,

August 2005, or September 2008 version

of Form 5304-SIMPLE to establish a

model Savings Incentive Match Plan,

you are not required to use this version

of the form.

Which Employers May

Establish and Maintain a

SIMPLE IRA Plan?

To establish and maintain a SIMPLE IRA

plan, you must meet both of the

following requirements:

1. Last calendar year, you had no

more than 100 employees (including

self-employed individuals) who earned

$5,000 or more in compensation from

you during the year. If you have a

SIMPLE IRA plan but later exceed this

100-employee limit, you will be treated

as meeting the limit for the 2 years

following the calendar year in which you

last satisfied the limit.

2. You do not maintain during any part

of the calendar year another qualified

plan with respect to which contributions

are made, or benefits are accrued, for

service in the calendar year. For this

purpose, a qualified plan (defined in

section 219(g)(5)) includes a qualified

pension plan, a profit-sharing plan, a

stock bonus plan, a qualified annuity

plan, a tax-sheltered annuity plan, and a

simplified employee pension (SEP) plan.

A qualified plan that only covers

employees covered under a collective

bargaining agreement for which

retirement benefits were the subject of

good faith bargaining is disregarded if

these employees are excluded from

participating in the SIMPLE IRA plan. If

the failure to continue to satisfy the

100-employee limit or the one-plan rule

described in 1 and 2 above is due to an

acquisition or similar transaction

involving your business, special rules

apply. Consult your tax advisor to find

out if you can still maintain the plan after

the transaction.

Certain related employers (trades or

businesses under common control) must

be treated as a single employer for

purposes of the SIMPLE IRA

requirements. These are: (1) a controlled

group of corporations under section

414(b); (2) a partnership or sole

proprietorship under common control

under section 414(c); or (3) an affiliated

service group under section 414(m). In

addition, if you have leased employees

required to be treated as your own

employees under the rules of section

414(n), then you must count all such

leased employees for the requirements

listed above.

What Is a SIMPLE IRA Plan?

A SIMPLE IRA plan is a written

arrangement that provides you and your

employees with an easy way to make

contributions to provide retirement

income for your employees. Under a

SIMPLE IRA plan, employees may

choose whether to make salary

reduction contributions to the SIMPLE

IRA plan rather than receiving these

amounts as part of their regular

compensation. In addition, you will

contribute matching or nonelective

contributions on behalf of eligible

employees (see Employee Eligibility

Requirements below and Contributions

later). All contributions under this plan

will be deposited into a SIMPLE

individual retirement account or annuity

established for each eligible employee

with the financial institution selected by

him or her.

When To Use Form

5304-SIMPLE

A SIMPLE IRA plan may be established

by using this Model Form or any other

document that satisfies the statutory

requirements.

Do not use Form 5304-SIMPLE if:

1. You want to require that all SIMPLE

IRA plan contributions initially go to a

financial institution designated by you.

That is, you do not want to permit each

of your eligible employees to choose a

financial institution that will initially

receive contributions. Instead, use Form

5305-SIMPLE, Savings Incentive Match

Plan for Employees of Small Employers

(SIMPLE)—for Use With a Designated

Financial Institution;

2. You want employees who are

nonresident aliens receiving no earned

income from you that is income from

sources within the United States to be

eligible under this plan; or

3. You want to establish a SIMPLE

401(k) plan.

Completing Form

5304-SIMPLE

Pages 1 and 2 of Form 5304-SIMPLE

contain the operative provisions of your

SIMPLE IRA plan. This SIMPLE IRA plan

is considered adopted when you have

completed all applicable boxes and

blanks and it has been executed by you.

The SIMPLE IRA plan is a legal

document with important tax

consequences for you and your

employees. You may want to consult

with your attorney or tax advisor before

adopting this plan.

Employee Eligibility

Requirements (Article I)

Each year for which this SIMPLE IRA

plan is effective, you must permit salary

reduction contributions to be made by

all of your employees who are

reasonably expected to receive at least

$5,000 in compensation from you during

the year, and who received at least

$5,000 in compensation from you in any

2 preceding years. However, you can

expand the group of employees who are

eligible to participate in the SIMPLE IRA

plan by completing the options provided

in Article I, items 1a and 1b. To choose

full eligibility, check the box in Article I,

item 1a. Alternatively, to choose limited

eligibility, check the box in Article I, item

1b, and then insert “$5,000” or a lower

compensation amount (including zero)

and “2” or a lower number of years of

service in the blanks in (i) and (ii) of

Article I, item 1b.

In addition, you can exclude from

participation those employees covered

under a collective bargaining agreement

for which retirement benefits were the

subject of good faith bargaining. You

may do this by checking the box in

Article I, item 2. Under certain

circumstances, these employees must

be excluded. See Which Employers May

Establish and Maintain a SIMPLE IRA

Plan? above.

Salary Reduction

Agreements (Article II)

As indicated in Article II, item 1, a salary

reduction agreement permits an eligible

employee to make a salary reduction

election to have his or her compensation

for each pay period reduced by a

percentage (expressed as a percentage

or dollar amount). The total amount of

Form 5304-SIMPLE (Rev. 3-2012)

Page 5

the reduction in the employee’s

compensation cannot exceed the

applicable amount for any calendar year.

The applicable amount is $11,500 for 2012.

After 2012, the $11,500 amount may be

increased for cost-of-living adjustments. In

the case of an eligible employee who is 50

or older by the end of the calendar year,

the above limitation is increased by $2,500

for 2012. After 2012, the $2,500 amount

may be increased for cost-of-living

adjustments.

Timing of Salary Reduction

Elections

For any 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.

You can extend the 60-day election

periods to provide additional opportunities

for eligible employees to make or modify

salary reduction elections using the blank

in Article II, item 2b. For example, you can

provide that eligible employees may make

new salary reduction elections or modify

prior elections for any calendar quarter

during the 30 days before that quarter.

You may use the Model Salary Reduction

Agreement on page 3 to enable eligible

employees to make or modify salary

reduction elections.

Employees must be permitted to

terminate their salary reduction elections at

any time. They may resume salary

reduction contributions for the year if

permitted under Article II, item 2b.

However, by checking the box in Article II,

item 2d, you may prohibit an employee

who terminates a salary reduction election

outside the normal election cycle from

resuming salary reduction contributions

during the remainder of the calendar year.

Contributions (Article III)

Only contributions described below may be

made to this SIMPLE IRA plan. No

additional contributions may be made.

Salary Reduction Contributions

As indicated in Article III, item 1, salary

reduction contributions consist of the

amount by which the employee agrees to

reduce his or her compensation. You must

contribute the salary reduction

contributions to the financial institution

selected by each eligible employee.

Matching Contributions

In general, you must contribute a matching

contribution to each eligible employee’s

SIMPLE IRA equal to the employee’s salary

reduction contributions. This matching

contribution cannot exceed 3% of the

employee’s compensation. See Definition

of Compensation, below.

You may reduce this 3% limit to a lower

percentage, but not lower than 1%. You

cannot lower the 3% limit for more than 2

calendar years out of the 5-year period

ending with the calendar year the reduction

is effective.

Note. If any year in the 5-year period

described above is a year before you first

established any SIMPLE IRA plan, you will

be treated as making a 3% matching

contribution for that year for purposes of

determining when you may reduce the

employer matching contribution.

To elect this option, you must notify the

employees of the reduced limit within a

reasonable period of time before the

applicable 60-day election periods for the

year. See Timing of Salary Reduction

Elections above.

Nonelective Contributions

Instead of making a matching contribution,

you may, for any year, make a nonelective

contribution equal to 2% of compensation

for each eligible employee who has at least

$5,000 in compensation for the year.

Nonelective contributions may not be

based on more than $250,000* of

compensation.

To elect to make nonelective

contributions, you must notify employees

within a reasonable period of time before

the applicable 60-day election periods for

such year. See Timing of Salary Reduction

Elections above.

Note. Insert “$5,000” in Article III, item

2b(i) to impose the $5,000 compensation

requirement. You may expand the group of

employees who are eligible for nonelective

contributions by inserting a compensation

amount lower than $5,000.

Effective Date (Article VII)

Insert in Article VII the date you want the

provisions of the SIMPLE IRA plan to

become effective. You must insert January

1 of the applicable year unless this is the

first year for which you are adopting any

SIMPLE IRA plan. If this is the first year for

which you are adopting a SIMPLE IRA

plan, you may insert any date between

January 1 and October 1, inclusive of the

applicable year.

Additional Information

Timing of Salary Reduction

Contributions

The employer must make the salary

reduction contributions to the financial

institution selected by each eligible

employee for his or her SIMPLE IRA no

later than the 30th day of the month

following the month in which the amounts

would otherwise have been payable to the

employee in cash.

The Department of Labor has indicated

that most SIMPLE IRA plans are also

subject to Title I of the Employee

Retirement Income Security Act of 1974

(ERISA). Under Department of Labor

regulations at 29 CFR 2510.3-102, salary

reduction contributions must be made to

each participant’s SIMPLE IRA as of the

earliest date on which those contributions

can reasonably be segregated from the

employer’s general assets, but in no event

later than the 30-day deadline described

previously.

Definition of Compensation

“Compensation” means the amount

described in section 6051(a)(3) (wages,

tips, and other compensation from the

employer subject to federal income tax

withholding under section 3401(a)), and

amounts paid for domestic service in a

private home, local college club, or local

chapter of a college fraternity or sorority.

Usually, this is the amount shown in box 1

of Form W-2, Wage and Tax Statement.

For further information, see Pub. 15,

(Circular E), Employer’s Tax Guide.

Compensation also includes the salary

reduction contributions made under this

plan, and, if applicable, compensation

deferred under a section 457 plan. In

determining an employee’s compensation

for prior years, the employee’s elective

deferrals under a section 401(k) plan, a

SARSEP, or a section 403(b) annuity

contract are also included in the

employee’s compensation.

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

SIMPLE IRA plan on behalf of the

individual.

Employee Notification

You must notify each eligible employee

prior to the employee’s 60-day election

period described above that he or she can

make or change salary reduction elections

and select the financial institution that will

serve as the trustee, custodian, or

*This is the amount for 2012. 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 IRS.gov.

Form 5304-SIMPLE (Rev. 3-2012)

Page 6

issuer of the employee’s SIMPLE IRA. In

this notification, you must indicate

whether you will provide:

1. A matching contribution equal to

your employees’ salary reduction

contributions up to a limit of 3% of their

compensation;

2. A matching contribution equal to

your employees’ salary reduction

contributions subject to a percentage

limit that is between 1 and 3% of their

compensation; or

3. A nonelective contribution equal to

2% of your employees’ compensation.

You can use the Model Notification to

Eligible Employees earlier to satisfy

these employee notification

requirements for this SIMPLE IRA plan. A

Summary Description must also be

provided to eligible employees at this

time. This summary description

requirement may be satisfied by

providing a completed copy of pages 1

and 2 of Form 5304-SIMPLE (including

the information described in

Article VI—Procedures for Withdrawals).

If you fail to provide the employee

notification (including the summary

description) described above, you will be

liable for a penalty of $50 per day until

the notification is provided. If you can

show that the failure was due to

reasonable cause, the penalty will not be

imposed.

If the financial institution’s name,

address, or withdrawal procedures are

not available at the time the employee

must be given the summary description,

you must provide the summary

description without this information. In

that case, you will have reasonable

cause for not including this information

in the summary description, but only if

you ensure that it is provided to the

employee as soon as administratively

feasible.

Reporting Requirements

You are not required to file any annual

information returns for your SIMPLE IRA

plan, such as Form 5500, Annual

Return/Report of Employee Benefit Plan,

or Form 5500-EZ, Annual Return of

One-Participant (Owners and Their

Spouses) Retirement Plan. However, you

must report to the IRS which eligible

employees are active participants in the

SIMPLE IRA plan and the amount of

your employees’ salary reduction

contributions to the SIMPLE IRA plan on

Form W-2. These contributions are

subject to social security, Medicare,

railroad retirement, and federal

unemployment tax.

Deducting Contributions

Contributions to this SIMPLE IRA plan

are deductible in your tax year

containing the end of the calendar year

for which the contributions are made.

Contributions will be treated as made

for a particular tax year if they are made

for that year and are made by the due

date (including extensions) of your

income tax return for that year.

Summary Description

Each year the SIMPLE IRA plan is in

effect, the financial institution for the

SIMPLE IRA of each eligible employee

must provide the employer the

information described in section

408(l)(2)(B). This requirement may be

satisfied by providing the employer a

current copy of Form 5304-SIMPLE

(including instructions) together with the

financial institution’s procedures for

withdrawals from SIMPLE IRAs

established at that financial institution,

including the financial institution’s name

and address. The summary description

must be received by the employer in

sufficient time to comply with the

Employee Notification requirements

earlier.

There is a penalty of $50 per day

imposed on the financial institution for

each failure to provide the summary

description described above. However, if

the failure was due to reasonable cause,

the penalty will not be imposed.

Paperwork Reduction Act Notice. You

are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records

relating to a form or its instructions must

be retained as long as their contents

may become material in the

administration of any Internal Revenue

law. Generally, tax returns and return

information are confidential, as required

by section 6103.

The time needed to complete this

form will vary depending on individual

circumstances. The estimated average

time is:

Recordkeeping . . . . 3 hr., 38 min.

Learning about the

law or the form . . . . 2 hr., 26 min.

Preparing the form . . . . 47 min.

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form

simpler, we would be happy to hear

from you. You can write to the Internal

Revenue Service, Tax Products

Coordinating Committee,

SE:W:CAR:MP:T:M:S, 1111 Constitution

Ave. NW, IR-6526, Washington, DC

20224. Do not send this form to this

address. Instead, keep it with your

records.

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Form 5304-SIMPLE Savings Incentive Match Plan

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Fillable Form 5304-SIMPLE Savings Incentive Match Plan

Fill Online, Printable, Fillable, Blank Form 5304-SIMPLE Savings Incentive Match Plan Form

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