1040-US: Special requirements for SIMPLE plans

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Question

Are there any special requirements for SIMPLE plans?

Answer

Yes. In general, the client cannot be in another employer-sponsored retirement plan such as a Keogh or SEP. A diagnostic displays when a SIMPLE deduction calculates and another self-employed retirement plan is present. Another requirement for SIMPLE plans is that there is at least $5,000 of self-employment compensation in the calendar year. A diagnostic displays when self-employment compensation is less than $5,000. In either circumstance, you should review the SIMPLE plan requirements and make any necessary changes to the return.

Related topic: Keogh, SEP, and SIMPLE contributions FAQs (1040)

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