Which employers can establish a SIMPLE IRA plan for their company?
Generally, employers (including tax-exempt and governmental employers) with 100 or fewer employees who earned $5,000 or more in compensation during the last calendar year may establish a SIMPLE IRA plan. For purposes of the 100-employee limitation, all employees employed at any time during the calendar year are taken into account, regardless of whether they are eligible to participate. An employer may not establish a SIMPLE IRA plan in any calendar year during which the employer maintained or contributed to any other plan. You may only maintain a SIMPLE IRA plan on a calendar-year basis.
What if the 100-employee limitation is exceeded after the SIMPLE IRA plan is established?
You may continue to use the SIMPLE IRA plan for no more than two years after the most recent calendar year in which you exceeded the 100-employee limitation.