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Official form guide
Form 5304-SIM: 5304-SIMPLE
IRS Form 5304-SIMPLE is a model plan document that lets eligible small employers establish a SIMPLE IRA, detailing employee eligibility, employer matching (up to 3% of compensation) or nonelective (2%) contributions, and salary‑reduction elections. Employers must have ≤100 employees earning $5,000+.
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IRS Form 5304-SIM - 5304-SIMPLE
IRS Form 5304-SIMPLE is a model plan document that lets eligible small employers establish a SIMPLE IRA, detailing employee eligibility, employer matching (up to 3% of compensation) or nonelective (2%) contributions, and salary‑reduction elections. Employers must have ≤100 employees earning $5,000+.
Risk Radar
Scan points- 1Filing the form with the IRS instead of keeping it for records triggers rejection.
- 2Failing to limit matching contributions to a maximum of 3% of compensation.
- 3Reducing the matching limit below 1% when using a reduced limit option.
- 4Exceeding the allowed two‑year reduction within a five‑year period.
- 5Not notifying employees of a reduced matching limit before their 60‑day election period.
Plain English
This form creates a SIMPLE IRA plan for a small business. It lists which workers can join, how the employer will contribute, and how employees can set aside pay. The completed form stays in the employer’s records, not with the IRS.
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 a SIMPLE IRA plan and you want to permit each eligible employee to choose their own financial institution for contributions.
- Do not use it when you want to require that all contributions initially go to a financial institution you designate, when you want nonresident alien employees with no U.S. earned income to be eligible, or when you want to establish a SIMPLE 401(k) plan.
- Check Form 5305‑SIMPLE instead when you want to require contributions to go to a financial institution designated by the employer.
Form selector
Use this form or another form?
You want contributions to go to a financial institution you designate
Employer‑designated institution is not allowed under Form 5304‑SIMPLE
✓ Verify you need a designated institution before proceeding
You need a SIMPLE IRA plan but cannot permit employee‑chosen institutions
This form requires employer designation of the institution
✓ Confirm that employee choice is not required
Your plan design includes a designated financial institution for contributions
Only Form 5305‑SIMPLE supports employer‑designated institutions
✓ Ensure the correct form is selected
Deadline or filing window
Not stated in the official source.
Checklist
What you need before filling it out
Employer name and EIN
Employer identification details · Top of Form 5304‑SIMPLE, page 1
Employee eligibility selection
Eligibility box (Full or Limited) · Article I, page 1
Filing instruction
Statement that the form is not filed with the IRS · Page 4 General Instructions
Retention instruction
Note to keep the form with your records · Page 4 General Instructions
Employer employee‑count limit
Count of employees earning $5,000+ · Page 4 employer eligibility section
Before you submit
- 1Verify the employer name and EIN are entered correctly
- 2Confirm the appropriate employee eligibility box (Full or Limited) is checked
- 3Ensure no indication that a designated financial institution is required
- 4Check that the employer does not exceed 100 employees earning $5,000 or more
- 5Confirm the employer does not maintain another qualified plan during the year
- 6Sign the form where required
- 7Date the form
- 8Retain a signed copy for your records
- 9Do not mail the form to the IRS
How to file this form
- 1Complete all required fields on Form 5304‑SIMPLE
- 2Execute the form by signing and dating it
- 3Retain the signed form in your business records
- 4Distribute copies to eligible employees as proof of plan adoption
- 5Maintain the form as evidence of plan establishment
Known limitations
- 1Not for use with a designated financial institution
- 2Not for nonresident alien employees with no U.S. earned income
- 3Not for establishing a SIMPLE 401(k) plan
- 4Cannot be used if the employer exceeds 100 employees earning $5,000+ or maintains another qualified plan
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.
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Fillable formOpen in Editor->Form 5304‑SIMPLE revision date is March 2012; the source does not indicate a newer version or a latest‑information page.
What changed or needs a fresh check
- Edition date — confirm the revision reads March 2012
- Fee — Not stated in the official source
- Mailing address — Not stated in the official source
- Signature — Not stated in the official source
Quick Facts
Downloads
After you file
- 1Store the signed Form 5304‑SIMPLE with your plan documents
- 2Keep the form in your records indefinitely as the official plan document
- 3Provide copies to each eligible employee
- 4If an error is discovered, prepare a corrected Form 5304‑SIMPLE and retain both versions
- 5Update the plan document if any eligibility or contribution rules change
Sources
- SRCForm p.1 — revision date March 2012
- SRCForm p.4 — 'Do not file with the Internal Revenue Service' statement
- SRCForm p.4 — When To Use Form 5304‑SIMPLE description of permissible employee‑chosen institutions
- SRCForm p.4 — Do not use if you want to require contributions go to a designated financial institution
- SRCForm p.4 — Do not use if you want nonresident alien employees with no U.S. earned income to be eligible
- SRCForm p.4 — Do not use if you want to establish a SIMPLE 401(k) plan
- SRCForm p.4 — 'Check Form 5305‑SIMPLE' recommendation for designated financial institution
- SRCForm p.4 — Employer eligibility: no more than 100 employees earning $5,000+
- SRCForm p.4 — One‑plan rule: no other qualified plan maintained during the year
- SRCForm p.4 — Keep the form with your records, do not send to IRS
Common confusion points
Do I need to file this form with the IRS?
The form includes a statement 'Do not file with the Internal Revenue Service'
→ Verify that the form contains the 'Do not file' notice before attempting to send it
Can I use this form if I have more than 100 employees?
Employer eligibility is limited to 100 employees earning $5,000+
→ Confirm your employee count does not exceed the limit
What if I want to designate a specific financial institution?
Form 5304‑SIMPLE only permits employee‑chosen institutions
→ Check Form 5305‑SIMPLE instead for a designated institution
Are nonresident alien employees eligible?
The form excludes nonresident aliens with no U.S. earned income
→ Verify employee citizenship and source of compensation
Can I use this form to set up a SIMPLE 401(k) plan?
The form is expressly not for SIMPLE 401(k) plans
→ Ensure the plan type is a SIMPLE IRA before using this form
Do I need to file this form annually?
The form is a plan adoption document, not an annual filing
→ Keep the original form on file; no yearly submission is required
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 5305‑SIMPLE — switch to this form if you need employer‑designated institutions
Questions about IRS Form 5304-SIM
What is IRS Form 5304-SIM used for?
This form creates a SIMPLE IRA plan for a small business. It lists which workers can join, how the employer will contribute, and how employees can set aside pay. The completed form stays in the employer’s records, not with the IRS.
Who must file IRS Form 5304-SIM?
Employers who want to establish and maintain a SIMPLE IRA plan and meet the eligibility requirements must complete IRS Form 5304-SIMPLE.
What information does IRS Form 5304-SIM require?
The form records employee eligibility criteria, the employer’s choice of matching contributions (up to 3% of compensation) or nonelective contributions (2%), and the details of salary‑reduction elections in Article II—Salary Reduction Agreements.
Where do I file IRS Form 5304-SIM?
Do not file IRS Form 5304-SIMPLE with the IRS; keep it with your records.
How do I complete IRS Form 5304-SIM?
First, determine employee eligibility using the compensation thresholds in sections (i) and (ii). Next, select either matching contributions (up to 3% of compensation) or nonelective contributions (2%) and complete the corresponding boxes. Then, complete Article II with each employee’s salary‑reduction election details, ensuring any reduced matching limit is communicated before the 60‑day election period. Finally, sign the form and retain it with your plan documents.
What happens if IRS Form 5304-SIM is filed incorrectly?
Filing the form with the IRS will result in rejection because it is a model document intended only for internal record‑keeping.
Do I need to file this form with the IRS?
The form includes a statement 'Do not file with the Internal Revenue Service' Verify that the form contains the 'Do not file' notice before attempting to send it
Can I use this form if I have more than 100 employees?
Employer eligibility is limited to 100 employees earning $5,000+ Confirm your employee count does not exceed the limit
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