SCP or VCP?
Inadvertently overcontributed to SEP by about $100k from 2020-2022.
Can I remedy this through SCP? Or is VCP necessary
While it’s subjective, it appears that due to the amount of excess and number of years, this does not qualify as an insignificant failure eligible for SCP.
Permalink Submitted by Alan - IRA critic on Fri, 2024-08-02 12:29
What caused the excess, exceeding the 415c limit or other miscalculation of the contribution allowed? Any other employees involved?
Permalink Submitted by Paul spumoni on Fri, 2024-08-02 14:05
No other employees involved. A $20k contribution was correctly allowed from an S-corp wages.
Then, self-employment income was passed through from a separate partnership (that doesn’t have a SEP) on a k-1, and that income was included in the calculation, resulting in the individual making the max annual SEP contribution in each of the 3 years, when the allowed contribution was only $20k/yr
Thank you