Contributing to Sep IRA with 1099 income from deceased spouse

Hi,

My father earned large 6 figure 1099 income (for one time contractor work) in 2022 and passed away in Sept. My mom is left with a hefty tax bill and we are working to see if she can set up a SEP IRA for a portion the 1099 income as the cash is not needed now so would be fine pushing it into an IRA to reduce taxable income.

Trying to figure out if you can contribute under a deceased name or use his income # and set one up herself?

Or other options.

Thanks,
Jimmy



While the IRS has clearly stated that a personal IRA contribution cannot be made for a decedent, a SEP contribution is an employer contribution, not a personal contribution. Your father is treated as both the employee and the employer. Therefore, while a SEP might be established, it will probably be difficult to find a custodian to allow a contribution, and if such a custodian could be found, if your Mom (or other executor) was allowed to open a SEP IRA, they would not be allowed to name a beneficiary and SEP would be subject to probate. Mom would also need a cooperating custodian to assign the inherited SEP out of the estate to herself assuming she would inherit under any will he left.



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