SEP IRA CONTRIBUTION WITH OUT EMPLOYEES CONTRIBUTION

Submitted by Douglas Bauerband on Tue, 2018-10-16 20:55

HAVE A CLIENT WHO HAD A SEP IRA ALREADY WHEN I MET WITH THEM YEARS AGO. SHE HAS FUNDED THIS ACCOUNT SEVERAL TIMES.

HER CPA CALLED THE OTHER DAY AND TOLD ME THEY HAVE NO SEP IRA FOR ANY OF THEIR EMPLOYEES FOR THE PAST COUPLE OF YEARS.

A. CAN WE DO A OVERFUND FORM TO GET THE MONEY OUT OF THE SEP IRA FOR 2016 AND 2017?

B. CAN WE DO A TRANSFER TO AN IRA FOR THE 2018 CONTRIBUTION TO THE SEP IRA?

C. CAN WE DO A TRANSFER FOR ALL YEARS TO AN IRA FROM THE SEP IRA FOR 16, 17, 18 CONTRIBUTIONS?

THANK YOU FOR ANY HELP
DOUG

Permalink Submitted by Alan - IRA critic on Thu, 2018-10-18 01:10

“B and C” would definitely not solve the problem since the client’s contributions were retained through rollovers. ” A” may or may not work as an aggressive option to the official EPCRS solution of making the retroactive contributions for the employees, as it is not mentioned in the following EPCRS SEP IRA fix it guide (see mistake #3). EPCRS suggests making the employees contributions plus making a reasonable attempt to replicate the amount of gains they would have had if their contributions were made timely.
https://www.irs.gov/retirement-plans/sep-fix-it-guide-common-problems-real-solutions