Can an S Corp officer with wages contribute to a SEP IRA

Forum|Forum|3 years ago
February 7, 2023
2 replies
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Lacerte Tax

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Best answer by Karl

Yes, based on wages, not SCorp profits. The "1 = max" calculations and irs.gov will help you get the right amounts. Remember that if you make employer contributions for the owner, you have to make pro-rate contributions for any other eligible employees, if any.

K

Karl

Answer

Intuit Community Champion

Yes, based on wages, not SCorp profits. The "1 = max" calculations and irs.gov will help you get the right amounts. Remember that if you make employer contributions for the owner, you have to make pro-rate contributions for any other eligible employees, if any.

*If this (or another answer/reply) solves your problem, please click "Accept as Solution" to get this post out of the "Unanswered" queue of posts.*

T

TaxGuyBill

Level 15

Actually, it is the other way around. The corporation with an employee/officer can contribute to the employee's SEP. So it is the corporation that is doing the contribution, not the employee/officer.

K

Karl

Intuit Community Champion

Agreed. Sorry, I rushed my prior comment. Employer contributions would go on 1120-S, any employee-level/side contributions are essentially a traditional IRA contribution and would go on the S-Corp owner's 1040.

*If this (or another answer/reply) solves your problem, please click "Accept as Solution" to get this post out of the "Unanswered" queue of posts.*

sjrcpa

Level 15

There's no employee contribution to a SEP.

(I'm assuming this is not a pre1986 SARSEP.)

The more I know the more I don’t know.

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