SIMPLE IRA Contribution Limits and the SECURE 2.0 Act
In 2024, the annual contribution limit for employee elective deferrals in a SIMPLE IRA is $16,000. The catch-up contribution limit for individuals aged 50 and older is $3,500. However, some employers may be able to increase these amounts by up to 10%. For these eligible employers, the annual contribution limit for employee elective deferrals is $17,600, and the catch-up contribution limit is $3,850 for those 50 and older.
Employer Eligibility
Not all employers are eligible to participate under the SECURE 2.0 Act. For instance, an employer is ineligible if they maintained an IRC section 401(a), 403(a), or 403(b) plan covering the same employees within a three-year period before establishing the SIMPLE IRA plan. It is important to consult with your IRA provider to confirm your eligibility under the SECURE 2.0 guidelines before creating or changing your IRA plan. Beyond is not responsible for verifying or guaranteeing an employer’s eligibility for the SECURE 2.0 Act.
Employers with No More Than 25 Employees
For companies with 25 or fewer employees, the SIMPLE IRA annual deferral and catch-up contribution limits are both automatically increased by 10%, reaching 110% of the 2024 contribution limits.
Employers with 26 to 100 Employees
An employer with 26 to 100 employees may also be eligible for these higher deferral limits. To qualify, employers must provide one of the following:
- A 3% non-elective employer contribution; or
- A 4% matching contribution.
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Additionally, employers with more than 25 eligible employees are required to formally elect the increased limits in writing and maintain proper documentation.
Required Written Policy Updates and Notification
Eligible employers of any size must notify participants of the new, higher contribution limits and update their company plan in writing. This notification must also be included with the required annual employer notice. Unless this notice was provided by the employer before November 2, 2023, the earliest this provision can be implemented for an existing SIMPLE IRA plan is for the 2025 plan year.
How to Indicate Your Eligibility for the Increased IRA Limit in Beyond
Navigate to Company, then Company Preferences.
Please verify your eligibility before selecting this option. By choosing “Yes,” you are confirming your eligibility for an increased IRA limit under the terms of the SECURE 2.0 Act. Since this directly affects employee withholding calculations throughout the year, this selection can only be reversed by contacting Beyond support.
If you are eligible under the terms of the SECURE 2.0 Act, select “Yes” to increase the SIMPLE IRA limit.
Our Tax Accuracy Guarantee
We take the accuracy of our payroll tax calculations very seriously, and our accuracy guarantee ensures we will always support you. However, because we file on your behalf using the information you provide, it is crucial that you input accurate information about your company, its employees, and the states and districts where they live and your business operates, including all IDs and tax rates. Our Tax Accuracy Guarantee begins where your responsibility ends, by covering all our calculations and the filings and payments based on them. In rare situations, Beyond may need additional information or ask you to take action for us to file and pay your taxes. If this information is requested but not provided, any affected tax filings and payments will not be covered by our Tax Accuracy Guarantee.
Need Help?
If you still have any questions, please don’t hesitate to reach out. Our team will be happy to provide answers and assist you in any way we can.