Can a SIMPLE plan be maintained on a fiscal year basis?
A. A-3: A SIMPLE plan may only be maintained on a calendar year basis. Thus, for example, employer eligibility to establish a SIMPLE plan (see Q&As B-1 through B-5) and SIMPLE plan contributions (see Q&As D-1 through D-6) are determined on a calendar year basis. B. EMPLOYERS THAT CAN ESTABLISH SIMPLE PLANS Q. B-1: Can any employer establish a SIMPLE plan? A. B-1: SIMPLE plans may be established only by employers that had no more than 100 employees who earned $5,000 or more in compensation during the preceding calendar year (“100-employee limitation”). See Q&As C-4 and C-5 for the definition of compensation. 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 in the SIMPLE plan. Thus, employees who are excludable under the rules of section 410(b)(3) or who have not met the plan’s minimum eligibility requirements must be taken into account. Employees also in
