SEP
I have a client who would like to set up a SEP he is a farmer who has some hired help but does not want to make contributions for them. It was advised by his accountant to set up the SEP. Can he exclude his employees and set up an individual account. If so how is the 5305 filled in regarding employee guidelines. Thanks.
Permalink Submitted by Martin Helmer on Thu, 2014-02-06 19:54
For a given year, the farmer must meet the same number of years of service requirement as the employees. So if this is for 2013, and three years of prior service are required plus attainment of age 21 during the prior 5 years ending 12/31/12, ANYONE meeting the requirement is eligible for a piece of any employer contribution. See IRC section 408(k)(2).