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Official form guide
Form 5304-SIM: 5304-SIMPLE
IRS Form 5304-SIMPLE is a model document used to establish and administer a SIMPLE IRA plan for Small Employers. Eligibility requires compensation of at least $ in the current year, with an annual limit of $5,000.
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IRS Form 5304-SIM - 5304-SIMPLE
IRS Form 5304-SIMPLE is a model document used to establish and administer a SIMPLE IRA plan for Small Employers. Eligibility requires compensation of at least $ in the current year, with an annual limit of $5,000.
Risk Radar
Scan points- 1Do not file Form 5304-SIMPLE with the IRS; keep it with your official records instead.
- 2Failing to meet the employee count requirement (no more than 100 employees) on the last calendar year.
- 3Maintaining another qualified plan during any part of the calendar year while using Form 5304-SIMPLE.
- 4Not notifying eligible employees before their 60-day election period when electing nonelective contributions.
- 5Reducing the matching contribution limit below 1% for more than 2 calendar years within a 5-year span.
Plain English
This form helps an employer set up a retirement savings plan (a SIMPLE IRA) for their employees. It outlines how much money the employer will contribute and who qualifies to participate. Employees can choose whether to reduce their salary or receive matching/nonelective contributions instead of those amounts being part of their regular paycheck.
Submission Date
- Filing date: 2012-08-06 00:00:00
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when establishing or administering a SIMPLE IRA plan where eligible employees may choose their own financial institution to receive contributions.
- Do not use Form 5304-SIMPLE if you want all initial SIMPLE IRA contributions to go to a single, designated financial institution chosen by the employer.
- Check Form 5305-SIMPLE instead when you wish to designate a specific financial institution for all employee contributions.
Form selector
Use this form or another form?
Wanting to require that all contributions initially go to an employer-designated institution
This form allows employees to choose their own financial institution
✓ Check the designation requirement on Page 4.
Wanting to establish a SIMPLE 401(k) plan instead of a standard SIMPLE IRA
The instructions note this specific alternative plan type is covered by this model form.
✓ Confirm the document scope on Page 4.
Form 5304-SIMPLE (or related documentation)
Needing eligibility for nonresident aliens receiving no earned income from U.S. sources
This option requires using Form 5304-SIMPLE, as noted in the instructions.
✓ Verify this specific allowance on Page 4.
Form 5304-SIMPLE (or related documentation)
Deadline or filing window
An eligible employee may make or modify a salary reduction election during the 60-day period immediately preceding January 1 of that year. The form itself is used to establish the plan, and no specific filing deadline for submission to the IRS is stated in the instructions.
Checklist
What you need before filling it out
Form Purpose
Model document for SIMPLE IRA plan · Form p.4
Nonelective Contribution Rate (Standard)
2% of compensation · Form p.1
Eligibility Compensation Threshold
At least $ [blank] in compensation for the calendar year · Form p.1
Nonelective Contribution Cap
No more than $5,000 per eligible employee (for nonelective) · Form p.1
Employee Notification Deadline
Within a reasonable period of time before the employees’ 60-day election period · Form p.1
Penalty for Missing Summary Description
$50 per day until provided (unless reasonable cause) · Form p.6
Before you submit
- 1Confirm all applicable boxes and blanks on Pages 1 and 2 are completed.
- 2Verify that the form has been executed (signed) by the employer.
- 3Ensure the summary description requirement is met, including details from Article VI—Procedures for Withdrawals.
- 4Check that if nonelective contributions are used, employees were notified of this option.
- 5Confirm the notification was provided before the employee's 60-day election period (if using nonelective contributions).
- 6Verify that compensation subject to the nonelective contribution does not exceed $250,000 for each eligible employee.
- 7Ensure you are not using this form if you wish to mandate a single financial institution.
How to file this form
- 1Complete all applicable boxes and blanks on Pages 1 and 2 of Form 5304-SIMPLE, as these contain the operative provisions.
- 2Execute (sign) Form 5304-SIMPLE to legally adopt the SIMPLE IRA plan.
- 3Provide employees with a summary description (including financial institution details if available), ensuring this meets the notification timeline required by Article II, item 2a.
- 4Retain a completed copy of Form 5304-SIMPLE with your records; do not send it to the IRS.
Known limitations
- 1The form does not apply if an employer wants to require that all SIMPLE IRA plan contributions initially go to a financial institution designated by the employer, instead of allowing employee choice.
- 2Do not use Form 5304-SIMPLE if the employer wishes employees who are nonresident aliens receiving no earned income from the United States to be eligible under this plan.
- 3The form is not to be used when establishing a SIMPLE 401(k) plan, which requires a different structure.
- 4If an employer later exceeds the 100-employee limit after having previously satisfied it, they are treated as meeting the limit for the 2 years following the calendar year of satisfaction.
- 5The form is not required to be used if the employer utilized the March 2002, August 2005, or September 2008 versions of Form 5304-SIMPLE.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition on file is Revision 3-2012, and this form serves as a model document for establishing and administering a SIMPLE IRA plan.
What changed or needs a fresh check
- Edition date — confirm Revision 3-2012 is used.
- Filer's action — ensure all applicable boxes and blanks are completed and the form is executed.
- Submission method — remember to keep a copy with your records; do not file it with the IRS.
- Required attachments — verify that pages 1 and 2 contain the operative provisions of the plan.
Quick Facts
Downloads
After you file
- 1Keep a copy of Form 5304-SIMPLE with your records.
- 2The SIMPLE IRA plan is considered adopted once all applicable boxes and blanks are completed and the form is executed by the employer.
- 3Do not file Form 5304-SIMPLE with the Internal Revenue Service (IRS); instead, keep it with your records.
- 4If an error occurs, the source does not specify a correction process but advises keeping the document for reference.
Sources
- SRCInstructions p.1 — The form establishes a SIMPLE IRA plan under section 408(p) of the Internal Revenue Code.
- SRCInstructions p.1 — Eligibility requires selecting either 'Full Eligibility' (all employees eligible) or 'Limited Eligibility'.
- SRCInstructions p.4 — Form 5304-SIMPLE is a model document used to establish a SIMPLE IRA plan under section 408(p).
- SRCInstructions p.4 — Do not file Form 5304-SIMPLE with the IRS; keep it with your records.
- SRCInstructions p.4 — To use this form, the employer must have no more than 100 employees (including self-employed) who earned $5,000 or more last year.
- SRCInstructions p.4 — The plan is adopted when you complete all applicable boxes/blanks and execute the form.
- SRCInstructions p.6 — Estimated time to prepare the form is 47 minutes.
Common confusion points
Do I file this form with the IRS?
The instructions state clearly not to file Form 5304-SIMPLE with the IRS.
→ Keep it with your records instead.
What is the eligibility requirement for employees?
Employees must meet requirements, and an employer can select either 'Full Eligibility' (all eligible) or 'Limited Eligibility'.
→ Check which box you selected on Page 1.
When does this plan officially start?
The SIMPLE IRA plan is adopted when Form 5304-SIMPLE has all applicable boxes/blanks completed and it has been executed by the employer.
→ Look for your signature block.
What counts as an 'employee' for the 100-person limit?
It includes self-employed individuals who earned $5,000 or more in compensation from the employer during the last calendar year.
→ Verify this count against your payroll records.
Does my company have to be small enough to use this form?
Yes; you must meet two requirements: 1) No more than 100 employees (last year), and 2) Not maintaining another qualified plan during any part of the calendar year.
→ Review Page 4, Requirement 1 & 2.
What if I have other retirement plans?
You cannot maintain another 'qualified plan' during any part of the calendar year to use Form 5304-SIMPLE.
→ Ensure you are not running a profit-sharing or SEP plan concurrently.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Consult your tax advisor | This is advised if the failure to satisfy the employee limit or one-plan rule is due to an acquisition.
Questions about IRS Form 5304-SIM
What is IRS Form 5304-SIM used for?
This form helps an employer set up a retirement savings plan (a SIMPLE IRA) for their employees. It outlines how much money the employer will contribute and who qualifies to participate. Employees can choose whether to reduce their salary or receive matching/nonelective contributions instead of those amounts being part of their regular paycheck.
Who must file IRS Form 5304-SIM?
An Employer must use Form 5304-SIMPLE to establish and maintain a SIMPLE IRA plan, provided they meet specific requirements regarding employee count and other qualified plans.
What information does IRS Form 5304-SIM require?
The form collects information detailing eligibility criteria (current and prior compensation), the type of contribution being made (Matching or Nonelective), and particulars about salary reduction agreements within Article II.
When is IRS Form 5304-SIM due?
Employees may make or modify a salary reduction election during the 60-day period immediately preceding January 1 of that year.
Where do I file IRS Form 5304-SIM?
The instructions state not to file Form 5304-SIMPLE with the IRS; instead, it must be kept with the employer's records. For more information, Pub. 560 and Pub. 590 are referenced.
How do I complete IRS Form 5304-SIM?
The employer establishes the plan by completing this model form. The document details contributions under Article II (Salary Reduction Elections). All contributions are deposited into a SIMPLE IRA selected by the employee, and the completed form must be kept with company records.
What happens if IRS Form 5304-SIM is filed incorrectly?
While the source does not specify a penalty for incorrect filing of Form 5304-SIMPLE itself, using an outdated version or failing to meet eligibility requirements means the plan may not be validly established.
Do I file this form with the IRS?
The instructions state clearly not to file Form 5304-SIMPLE with the IRS. Keep it with your records instead.
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