To participate in a Simple IRA, your employer must first offer the plan. Your employer must have fewer than or equal to 100 employees that received $5,000 or more in compensation in the prior year. The second rule is that the employer cannot offer another qualified plan, such as a 401k.
Employees wishing to participate in their employer’s Simple IRA plan must have received at least $5,000 in compensation in the past two years and be expected to receive at least $5,000 in the current year.
A Simple IRA is a great plan for business owners who want employees to be able to contribute to their retirement.