SEP Contribtuions
If an emmployee closes their SEP account and the annual Employer contribution as not been made, can the Employer just write a check to the employee for their portion of the annual contribtuion? Or, does a new account have to be set up?
Permalink Submitted by mk foss on Wed, 2009-08-26 00:24
A new account should be set up for the employee. If the employer just wrote a check to that person, income taxes and payroll taxes would have to be withheld and it would be fully taxable to the employee. In addition, writing the check would jeopardize any contribution that the owner had more for himself to a SEP because you must cover all eligible employees.