I have several clients who have set up SIMPLE IRAs for their employees. One client called me with the question of whether he has to do the 3% match at the end of the year for employees who left the job during the middle of the year.
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Simple Match
IRS Notice 98-4, Answer to question G-5 says that an employer must contribute elective salary reductions to the financial institution maintaining the employee’s SIMPLE IRA no later than the close of the 30-day period following the last day of the month in which amounts would otherwise have been payable to the employee in cash.
G-6 goes on to say the matching and non-elective employer contributions must be made to the financial institution maintaining the SIMPLE IRA no later than the due date for filing the employer’s income tax return, including extensions, for the taxable year that includes the last day of the calendar year for which the contributions are made.
I can’t find any exceptions that say the employer does not have to make the matching contribution if the employee quits in the middle of the year. If the employee made salary reduction contributions, the employer must match.
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