Click here for FAQs on business eligiblity and more.
What is the difference between an employer contribution and a salary deferral contribution?
If your business is incorporated, the employer contribution is based on your W-2 income and is contributed by the business. The maximum employer contribution is 25% of pay. It is not subject to federal income tax or Social Security (FICA) taxes. The salary deferral contributions are withheld from your pay pre-tax contributions and are excluded from federal income tax but are subject to FICA. The maximum salary deferral amount for 2015 is 100% of pay up to $18,000 or $24,000 if you are age 50 or older. Your business receives a tax deduction for employer contributions and salary deferral contributions not designated as Roth. Note: Your annual contributions to Uni-K cannot exceed $53,000 or 100% of pay ($59,000 if you are age 50 or older).¹
If your business is unincorporated, the employer and salary deferral contributions are based on your net earned income. For help in determining your maximum contribution amount, see the Uni-K Calculator. Contributions are not subject to federal income tax but are subject to self-employment taxes (SECA)². You receive a tax deduction for both salary deferral and employer contributions on your Form 1040.
Can I contribute to a Uni-K Plan for my sideline business if I participate in another employer-sponsored plan?
Yes. You can contribute to a Uni-K Plan. However, if you make salary deferral contributions to another employer's plan, you must count those amounts along with any deferrals made to your Uni-K when determining the maximum deferrals that may be contributed for the year. This aggregation is not necessary for employer contributions.
Can the employer contribution vary by participant?
No. Each owner and spouse must receive the same percentage-of-pay contribution. So if you give yourself a 25%-of-pay employer contribution, all participants must receive a 25%-of-pay contribution. This rule does not apply to salary deferral contributions. Each participant may choose how much to defer. You may elect to have your salary deferral contributions be made on either a pre-tax or Roth basis.
When must contributions be made in order to take a deduction for a given year?
Employer contributions must be made by the business tax filing
deadline plus extensions. Generally, salary deferrals should be
deposited by the 15th business day following the month in which
they are withheld from pay or business income.
What are my administrative responsibilities?
Since your plan covers only owners and spouses, your administrative requirements are minimal. In addition to remitting contributions to the plan, the IRS requires an annual filing of the Form 5500-EZ. Generally, no filing is required for the year until total plan assets exceed $250,000 (or you terminate the plan (regardless of plan size)). Pioneer offers an optional low cost service to provide you with a signature-ready form. If you prefer to prepare the 5500-EZ yourself, Pioneer will make available an annual package of filing instructions.
Before investing, consider the productís investment objectives, risks, charges and expenses. Contact your advisor or Pioneer Investments for a prospectus or summary prospectus containing this information. Read it carefully.