SEP IRA Current Employer Rollover to IRA

Submitted by Eleonora Tomasello on Tue, 2024-07-02 00:36

My client had an SEP IRA from her current employer and she requested a check to close the account.  She wants to roll the funds to an IRA.  Is this possible with out creating taxes or penalties?  My client is younger than 59 1/2 and is still working at the same employer that made the contributions.  The employer is no longer going to deposit funds to this account.  He is planning to open accounts at a different custodian.

I appreciate any guidance.

 

 



Submitted by Alan - IRA critic on Tue, 2024-07-02 02:29

A rollover of the distribution will be non taxable assuming that the client has not already used the one 60 day rollover allowed over a 12 month period. Would have been better to do a non reportable direct transfer to the IRA, as that would be easier and would not use up the rollover.

Submitted by Eleonora Tomasello on Fri, 2024-07-19 12:30

To clarify, there’s no restriction on Rolling over the funds to a Rollover IRA from a current employer’s SEP account if the employer is no longer going to make deposits to the account and is starting a new SEP account at another institution.  She has not done a 60 day rollover in the last 12 months.

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