Employer Eligibility:
Contribution (Benefit) Limits:
Under Age 50:
$10,000 in 2005
$10,000 in 2006
$10,500 in 2007
$10,500 in 2008
Catch-up: Age 50 and Up
$2,000 in 2005
$2,500 in 2006
$2,500 in 2007
$2,500 in 2008
Above limits cannot exceed 100% of compensation. Employers must offer a 3% match or give a 2% mandatory contribution to eligible employees. This is in addition to the deferral limits above.
Basic deferral limits may increase annually based upon cost-of-living indexing.
Maximum Employee Eligibility Requirements:
An Employer can require that an employee:
earn $5000 in each of any two prior calendar years, AND
b reasonably expected to earn $5000 in the current year
Employer can exclude union members and non-resident aliens.
There are no age or number of hour requirements
Set-up Deadline:
October 1 of the current year. Should be established early in the year to allow time for salary deferrals.
Contribution Deadline:
Salary deferral contributions must be deposited by the 30th day of the month following deferral.
Matching and non-elective contributions are due by the business’s tax filing deadline, including extensions.