Combined annual addition to 401k plan and a SEP
I have a client who is full time, 56 year old employee who is eligible to defer/contribute $22,000 this year to his employers 401k this year. The employer will match this 50%. This employee is also a consultant to a completely unrelated company. He will earn $400,000 of consulting income this year as well. Can he contribute $49,000 to the SEP as well or is he capped in total ($49,000) under section 415 for both plans?
Permalink Submitted by Alan Spross on Fri, 2011-06-17 17:17
As long as the employers are totally separate, the 49,000 415c limit applies separately to each employer.
One exception here applies to 403b plans which are deemed to be a plan of the employee, but this is not an issue if there is no 403b.
Permalink Submitted by George W Smith IV on Fri, 2011-06-17 19:51
Good. Thank you.