As an employer, you can establish your SIMPLE IRA plan between January 1 and October 1 of each plan year. If you’re a new employer, you can start your plan as soon as it's administratively feasible. If you’ve previously had a SIMPLE IRA plan and wish to start a new one, it must be set up to take effect on January 1 of the upcoming year.
Employee Notice Period:
Employers are required to notify employees about contribution details and the SIMPLE IRA plan at least 60 days before the effective date of the plan.
Employee Contributions:
Employee contributions to a SIMPLE IRA are deducted from their salaries throughout the year. As an employer, you are responsible for depositing these salary deferrals into each employee's SIMPLE IRA account within 30 days after the end of the month in which contributions were made. For instance, if an employee defers their salary in January, you have until the end of February to make that deposit.
Employer Contributions:
As an employer, you can contribute to your employees’ SIMPLE IRAs through matching contributions or fixed percentage contributions based on employee compensation. The deadline for employer contributions aligns with your business’s tax filing deadline, which is typically April 15 for most businesses. If you file for an extension, this deadline can be extended to October 15.