What is a SIMPLE-IRA?

A SIMPLE (Savings Incentive Match Plan for Employees) IRA is a retirement plan that allows employers and employees of small businesses to make tax-deferred contributions to the plan.

• Employer Contribution Limits

• Option 1 – Matching Contribution

• Dollar-for-dollar match of employee contributions up to 3% of each employee’s compensation.

• The employer may reduce the match to as low as 1% in no more than 2 out of any 5 years.

• Option 2 – Nonelective Contribution

• Employer contributes 2% of each eligible employee’s compensation, whether or not the employee contributes.

• For 2026, compensation used to calculate the contribution is capped at $360,000.

• Additional Notes

  1. Employer contributions are generally tax-deductible.

  2. A SIMPLE IRA requires an employer contribution every year using one of the permitted contribution methods.

Employee contribution limits

• Employees can contribute up to $17,000 for the 2026 tax year. Age 50-59 or 64+ catch up of an additinal $4,000. Age 60-63 catch up of an addition $5,250