Jump to content

Eligibility issues when going from SEP to a 401k


Guest dubya

Recommended Posts

Guest dubya

I have a potential client who has a SEP and now wants to switch to a PS plan. Apparantly he has several employees who work low hours, yet were eligible to be in the SEP. He now wants to keep them out of the PS. Assuming we go with a 1000 hour requirement/1 year of service to enter the PS plan, is it acceptable therefore that we could have employees who were in the SEP, but not eligible to be in the PS plan? Seems OK to me.

Link to comment
Share on other sites

Your interpretation is correct. If the SEP and PS contributions are deductible in the same taxable year, however, the PS contribution deduction amount is reduced by the deductible SEP contribution amount.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...