SIMPLE IRA - Savings Incentive Match Plans For Employees
The SIMPLE IRA plan is a retirement plan. Small employers and self employed individuals can set up this IRA retirement plan.
It is a tax favored retirement plan that is a written salary reduction agreement between you and your employer or for yourself if you are self-employed.
It is designed to reduce your salary by a specific percentage. Your employer contributes that amount to the SIMPLE IRA for your benefit.
These are called "Salary Reduction Contributions".
You have to have received at least $5,000. from your employers in the past 2 years before the current year.
You will have to have reason to expect to get at least $5,000 compensation in the current year, and any future years that contributions are made.
This also applies to a self employed person who received earned income.