employee has 2 different employers-each with a simple ira. He has contributed $10,500 to one and $5,000 to the other (2008 limits) per his total allowed for aggregate accounts. The question is: can he do $2,500 catch up in EACH acccount for a total of $5,000 catchup? (yes, he's over 50). I have looked at pub 560 and rule 402g and it does not clarify that you can NOR does it say you can't. It never says per or total on the $2,500 catchup allowed.

Of course he can. His overall limit, by the same principle you used, would be $20,500. So, he could simply to $10,250 in each one; and he is fine.

You won't find this answer within the SIMPLE IRA rules; as each SIMPLE IRAs rules applies to that specific employer. 402(g) applies directly to the taxpayer. $15,500 plus $5,000 is what the taxpayer is allowed to do. If that comes from two SIMPLE IRAs, or $15,500 to a 401(k) and $5,000 to a Traditional IRA (assuming under the phaseout limits), then that works.

Just ensure those employers aren't related.

Thank you for your thoughts. He is part owner of each employer. How does that affect them? And if your logic applies, then why couldn't he put $10,500 in each Simple plus a $2,500 catchup since each simple has it's own limits? I thought the aggregate rule applied anyway????

I agree about the need to insure the 2 employers aren't in a controlled or affiliated service group. But the SIMPLE catchup limit is $2,500 in aggregate, where there are multiple plans. This is in the preamble to the catchup regulations, where it implies further confirmation is in the Internal Revenue Code itself and in the body of the catchup regulations.

Code Sec 408(p) describes SIMPLE IRAs. Code Sec 402(g) defines the annual contribution limit; specifically, 402(g)(3)(D) includes elective contributions under 408(p)(2)(A)(i). 402(g)(1)(c) says the amount excluded from an individual's gross income also includes the "applicable dollar amount" under 414(v)(2)(B)(i). It further says that amount is "without regard to the treatment of the elective deferrals by an applicable employer plan under section 414 (v)" (which, among other impacts, means you ignore the qualifier in 414(v)(2)(B)(i) which applies at the plan level and just take the specific dollar amount from the paragraph).

The consequence is a weird disparity between the plans' limits and the individual's limits. An individual SIMPLE IRA can't let you make catch-up of more than $2,500. But you as an individual, using two separate SIMPLE IRA plans (of unrelated employers), can make $2,500 + $2,500 for a total of $5,000.

This fits w/ Denise Appleby's answer to the same question here: http://www.investopedia.com/ask/answers/07/SIMPLE_IRA.asp

As several posters agreed above, it's extremely important that the companies not be related or else they likely count as one single employer and the limits then apply in aggregate.

EDIT: just caught this piece...

This gives you a major problem. See my last sentence above.

THank you for your assistance!!