SEP IRA Contribution – Employer or Employee?
Self-employed individual. No other employees. Going to make a SEP IRA contribution. Custodian is asking if the contribution is an employer contribution or employee contribution. How is this determined, and what are the ramifications of one versus the other?
Permalink Submitted by David Mertz on Thu, 2023-12-14 18:32
SEP contributions are always employer contributions unless the plan is a SARSEP established before 1997. A SARSEP is the only kind of SEP plan that allows employee salary-reduction contributions. No SARSEPs are permitted to be established after 1996.