SCP or VCP?
Inadvertently overcontributed to SEP by about $100k from 2020-2022.
Can I remedy this through SCP? Or is VCP necessary
Inadvertently overcontributed to SEP by about $100k from 2020-2022.
Can I remedy this through SCP? Or is VCP necessary
Permalink Submitted by Alan - IRA critic on Fri, 2024-08-02 12:29
What caused the excess, exceeding the 415c limit or other miscalculation of the contribution allowed? Any other employees involved?
Permalink Submitted by Paul spumoni on Fri, 2024-08-02 14:05
No other employees involved. A $20k contribution was correctly allowed from an S-corp wages.
Then, self-employment income was passed through from a separate partnership (that doesn’t have a SEP) on a k-1, and that income was included in the calculation, resulting in the individual making the max annual SEP contribution in each of the 3 years, when the allowed contribution was only $20k/yr
Thank you
Permalink Submitted by Alan - IRA critic on Fri, 2024-08-02 22:47
While it’s subjective, it appears that due to the amount of excess and number of years, this does not qualify as an insignificant failure eligible for SCP.