Employee Retirement Plans

[S T]

Employee worked for one employer through August 2016 and was enrolled in 401K, new employer Sept 2016 and wants to contribute to Simple IRA plan and wants to contribute maximum of $ 12,500

For employee is there a annual maximum limit combined between the 401K and the Simple IRA? Let's say employee has $15K on ther 401K plan prior employer and now wants to contribute by 12/31/2016 $ 12,500 to new employers Simple IRA,

Will Employee be over limit for 2016?

Thanks

Sandy

[New York Enrolled Agent]

Employee worked for one employer through August 2016 and was enrolled in 401K, new employer Sept 2016 and wants to contribute to Simple IRA plan and wants to contribute maximum of $ 12,500

For employee is there a annual maximum limit combined between the 401K and the Simple IRA? Let's say employee has $15K on ther 401K plan prior employer and now wants to contribute by 12/31/2016 $ 12,500 to new employers Simple IRA,

Will Employee be over limit for 2016?

Yes

IRC §402(g) caps the SIMPLE to $3K for a total elective deferral of $18K. This assumes the TP has not yet reached age 50.

[S T]

Thanks for posting

I did find more information, just wanted to confirm that I was interpreting correctly. I do not want to place the employee in jeopardy of over contributing to his retirements accounts when he has more than one employer in the year.

Sandy