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What are the Contribution Limits for Simple IRAs for 2020?

Simple IRA contributions are made up two parts; an employee contribution and an employer contribution. As an employee, the most you can contribute to your Simple IRA in 2020 is $13,500 if you are under 50 years old. If you are over 50 years old, the amount increases to $16,500. The maximum contribution an employer can make to an employee’s Simple IRA in 2020 is either a match of the employee’s Simple IRA contribution up to 3% of the employee’s compensation or a non-elective contribution to eligible employees up to 2% of the employee’s compensation (up to $285,000).

Simple IRAs are also called SIMPLEs and Savings Incentive Match Plan for Employees.

What is the Deadline for Simple IRA Contributions?

Simple IRA plans must be established by October 1. Employers must make matching and non-elective Simple IRA contributions by the tax filing deadline, typically April 15. However, this deadline may be later if the employer files an extension.

Learn more about small business and self-employed retirement plans

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This article was written by Shoreline Financial Advisors. To learn more about us, please visit our website.

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