Active participation in a qualified plan
S Corp has one shareholder/employee. No contributions to SEP for 2022 in 2022 or 2023. SEP contribution FOR 2023 will be made in 2024. Is the shareholder/employee not considered to be an active participant in a qualified plan during 2023 because the SEP contribution FOR 2023 was not made until 2024? If the shareholder/employee is not considered to be an active participant in a qualified plan during 2023, can he make (and deduct) an IRA contribution FOR 2023 by 4-15-24? Assume a very substantial AGI for 2023.
Permalink Submitted by Alan - IRA critic on Sun, 2024-02-11 15:29
SEP contributions result in active participation only in the year IN WHICH they are made, so there is no active participation in 2023. He can make a deductible TIRA contribution for 2023 assuming there is no spouse who is an active participant.