SEP IRA employee vs partner - Spidell

SEP IRA employee vs partner

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Message Board SEP IRA employee vs partner

This topic contains 2 replies, has 2 voices, and was last updated by Anonymous 1 week, 5 days ago.

  • Author
  • #179277

    Clients who are a married couple set up an LLC as a partnership. Both are partners and there are no other partners. In year one and two they both make contributions to a SEP.  In year three they hire their first employee. Since they have already started making contributions for themselves to a SEP, can they still exclude employees using the rule that they have to work 3 out of the last 5 years? They didn’t apply that rule to themselves at the start. Is it different because they are partners?

  • #179338
    Lynn Freer

    No, you must cover the employee if you want to cover the owners.

  • #179513

    Thank you!