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5305-SEP Eligibility


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Client has provided copy of seminar materials that state that an employer cannot use Form 5305-SEP if it has ever maintained a defined benefit plan (even if it has been terminated). The current Form 5305-SEP instructions and Pub 560 state that an employer cannot use the Form if it currently maintains any 401(a) qualified plan. However, I have not been able to find any authority for the statement that maintaining a DBP in the past disqualifies the employer from using Form 5305-SEP.

Am I missing something? Cites, please.

Thanks for any help.

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The old IRS 5305 model SEP form did indeed contain the prior DB restriction that your client mentions. However, as you correctly noted, this restriction has since been removed. I can't, offhand, tell you when this revision was made. It may have been on the January 2000 updated 5305.

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