SEP Question
We have a client that currently has a Sep IRA. He has an employee who will be eligible for the SEP in 2022. So my questions are:
-If the owner is contributing 3% of his income will the worker also have to contribute 3%?
-Can they contribute for the 2021 tax year without including him?
-Will they have to contribute for him in 2022?
Permalink Submitted by Alan - IRA critic on Thu, 2021-12-30 18:23
No, all SEP contributions are employer contributions. The owner will have to contribute 3% of employee’s compensation, subject to max limits for high earnings employees.
For 2021, the owner can contribute to his own SEP IRA but not for any non eligible employee.
Yes, since employee is eligible.