401(k) participant & making a SEP contribution still correct?
Below is a submission to the Forum back in 2011 the I have copied into this question. Is this guidance still correct? That if you are in a 401(k) plan you can also make a SEP contribution and the limitations for having multiple defined contribution plans is not affected? I thought a SEP had to look at all defined contribution plans for the limitation yearly? Person has a 401(k) and a SEP IRA Submitted by dblitz@ iraclub.org on Sat, 20110514 12:05 Forums: IRA Discussion Forum If a person has a 401(k) at their “day job” and they own a small part time business where they have a SEP IRA; 1. May they still make a SEP Contribution? 2. If so, how is the SEP contribution computed due to the existence of a 401(k) contribution? Is the SEP contribution reduced by the amount contributed to 401(k)? Re: Person has a 401(k) and a SEP IRA Submitted by alanoniras@ yah… on Sat, 20110514 18:53 1) Yes 2) It is not affected by the 401k as long as they do not have a more than 50% interest in the “day job” employer.
Permalink Submitted by Alan - IRA critic on Mon, 2017-02-27 17:20
Unless the SEP is an old SARSEP plan still remaining active, the SEP IRA contribution is not an elective deferral, therefore the 18k elective deferral limit only applies to the 401k. The section 415(c)(1) DC plan limit applies per plan unless the plans are considered to be those of the same employer. Former reply remains applicable.