ROTH SEP IRA

Submitted by Jonathan Sard on Tue, 2024-01-30 14:35

Do you know any custodians who are allowing for the Roth SEP IRA? We custody at Schwab and even though the recent Notice allows employers to use existing SEP model documents to offer Roth contributions, how are we able to take advantage of the Roth SEP if the custodian does not offer that option?

Thank you!



Submitted by David Mertz on Tue, 2024-01-30 15:58

IRS Notice 2024-2 indicates that the result of a SEP Roth contribution is the same as can be accomplished by the employer making a traditional SEP contribution and the employee immediately converting that amount to Roth, so that could just be done instead.  It’s only slightly less convenient in that it relies on the employee to request the Roth conversion.

Submitted by Alan - IRA critic on Tue, 2024-01-30 16:32

  • Custodians do not offer this option yet because the IRS has not provided complete guidance on all aspects of Roth SEP or SIMPLE contributions per Sec 601 of Secure 2.0. Partial guidance was just released in January starting on p 63 of the following IRS Notice, but W-2 reporting procedures and code and employee election procedures need further guidance:
  • N-2024-02 (irs.gov)

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