Return SEP contribution
Employer made a SEP contribution to himself of 20% of pay. Then decided he did not want to get all the eligible employees 20% of pay. Contribution is for 2010 and was deposited in 2011 however he does not want to call some of it a 2011 contribution because he is setting up a PS Plan for 2011.
Can the SEP contribution in part (enough to reduce contribution to a 5% contribution) be returned? It is not an excess contribution, he just decided it was too more than he wanted after the deposit?
Thank you
Permalink Submitted by Alan Spross on Mon, 2011-08-22 00:48
The amount of the contribution he wants returned can be requested in the same manner as for a traditional IRA, same deadlines and and earnings calculation. The original contribution does not have to be an excess contribution to do this. Of course, the tax return must reflect the actual final contribution that is not removed.