What happens if an employer over-contributes to a SIMPLE IRA?
A. Generally, an employer contribution which exceeds the applicable matching or non-elective contribution limit is considered to be a non-deductible employer contribution. The IRS has not issued any substantive guidance on whether these amounts can be corrected by the employer. However, under EPCRS, the employer may be able to request a corrective distribution adjusted for earnings to the employer. The employer should consult with legal counsel or a tax advisor for further guidance.
