SEP Contributions for new plan
If a dental practice is in its first year and the dentist decides to add his wife as an employee, may she receive a SEP contribution while still excluding the other full time employees over 21yrs old earning $500+ based on the 3yr out of 5yr eligibility rule?
Permalink Submitted by Martin Helmer on Tue, 2009-06-16 14:56
The wife must meet the plan’s eligbility requirements. The dentist himself must meet them too. If a business in its first year has a plan that requires 3 years of service, then no one at all is eligible to receive a contribution.
If a business has changed in form, such as from a sole proprietorship to a LLC, it’s possible to count proprietorship service for purposes of the LLC’s plan.