Can employers of domestic employees (including nannies, babysitters) sponsor SIMPLE IRAs for them?

If so, are the contributions deductible, even though the employment is not occurring in the context of a "trade or business" (thus qualifying for a section 162 deduction)?

Domestic employees can participate in a SIMPLE. The employer gets no deduction, since there's no trade or business. Section 4972 was amended by EGTRRA to provide for no 10% excise tax on nondeductile contributions made on behalf of household employees participating in a SIMPLE.