SIMPLE-IRA - Can multiple S-Corporations contribute to the same account?

Question

I recently set up a SIMPLE-IRA account at an online brokerage. I have two S-Corps that pay out SIMPLE-IRAs to its employees.

Can I distribute money from both S-Corps to the same SIMPLE-IRA account or do they have to be distributed to individual SIMPLE-IRA accounts?

Answer 1

Each S-corp is bound by its own plan documents, which typically do not limit or dictate where the investments are held. Your brokerage account has no tie to the company from which the funds come, however, you are still subject to maximum SIMPLE contribution rules and cannot exceed the $12,500 (if under age 50) COMBINED contribution for any and all companies. Be careful about co-mingling from both companies as there are penalties for early withdrawals made within 2-years of participating in the plan. If you started them both at the same time it's not an issue.

Answer 2

Those aren't distributions, they're contributions. Distribution is when the money comes out of the retirement accounts.

Here is the best source (the IRS) for information about tax advantaged retirement plans.