I have a client that owned a business with multiple employees that did not have a retirement plan. He also does some independent contracting. Previously, I had told him he could not do a retirement plan for the 1099 work since he’d have to include his employees from his main business due to controlled group. He shut down his main business earlier in the year to focus on his self-employed work. Can he make a SEP contribution for 2021 and not include the employees from his now closed business?

Another client sold her business and it did not have a retirement plan. She then started consulting for the acquirer which had a 401(k) plan. Can she start a SEP for her consulting business and not include the employees that worked for her that now work for the acquirer since potentially the controlled group ended, all in the same calendar year?