Frequently Asked Question

January 27 2006 | Filed Under ยป , ,

Are the deferred earnings in a SIMPLE IRA subject to FICA taxes?

While salary deferral contributions to a savings incentive match plan for employees of small employers (SIMPLE) IRAs and SIMPLE 401(k)s are not subject to income tax withholding, they are subject to tax under the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA) and the Railroad Retirement Act (RRTA).

Coincidentally, employer matching and nonelective contributions are not subject to FICA, FUTA or RRTA taxes.

To read more, visit Plans The Small Employer Can Establish, SIMPLE IRA Vs. SIMPLE 401(k ) and Introduction To Simple 401(k) Plans.

This question was answered by Denise Appleby
(Contact Denise)

by

Denise Appleby

Denise Appleby
Denise Appleby is founder and owner of Appleby Retirement Consulting,which provides technical consultation, content, coaching, writing, editing and training services on related topics.


With more than 14 years of experience in the IRA and defined-contribution plans fields, Appleby has held several senior retirement-plan related positions with Pershing LLC, which included vice president of plans products and services, retirement plans manager, trainer, training manager, compliance consultant, technical help desk manager and writer.
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