SIMPLE IRA Excess Contributions. Excess contributions to your
SIMPLE IRA Excess Contributions. Excess contributions to your SIMPLE IRA may be the result of your elective (including catch-up) deferrals exceeding the calendar year dollar amount limits, your employer making matching or nonelective contributions which exceed the limits for these contributions, or your employer making contributions to your SIMPLE IRA after the date your employer determines it was not eligible to maintain the SIMPLE plan. In order for you to avoid a 6 percent excess contribution penalty, excess contributions must generally be removed with earnings by your tax-filing due date, including extensions. If you timely file your federal income tax return, you may still be able to remove your excess contribution, plus attributable earnings, as late as October 15 for calendar year filers. Excess contributions are generally included in your income. Your SIMPLE IRA excesses cannot be recharacterized and cannot be used as a traditional IRA contribution. Your employer should inform you when an excess contribution has occurred along with the steps needed to correct it.
SIMPLE IRA Excess Contributions. Excess contributions to your traditional IRA or other eligible retirement plan until two years have SIMPLE IRA may include the result of your elective (including passed since the date on which you first participated in your catch-up) deferrals exceeding the calendar year dollar amount limits, employer's SIMPLE, which is the initial contribution date. This your employer making matching or nonelective contributions which document refers to such time frame as the two-year holding period. exceed the limits for these contributions, or your employer making If you participated in SIMPLEs of different employers, the initial contributions to your SIMPLE IRA after the date your employer contribution date and two-year period are determined separately for determines it was not eligible to maintain the SIMPLE plan. SIMPLE assets from each employer. In order for you to avoid a 6 percent excess contribution penalty,
