Simple IRA for non contributing employee

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Topic Author
drramey
Posts: 62
Joined: Sun May 16, 2021 12:00 am

Simple IRA for non contributing employee

Post by drramey »

I have a small business with three employees. One of which is new and will be qualified to make Simple IRA contributions next year. They have already told me that they aren’t going to be making any contributions. I did some reading on the IRS website and it states they can’t opt out but they don’t have to contribute either. If they don’t contribute there’s nothing for me to match.(we do salary deductions and I match up to 3%). In this scenario do I just have them sign an IRS form 5304 and skip opening an account for them??
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