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Excess Employer Sep contributions


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Hi all,

question about what the 560 says about excess employer contributions.

560 says excess contributions are treated as gross income in the year received and treated as contributions by the employee to his or her sep ira.

so I would assume those funds would be included in the employees gross income and then, Does that mean those funds are treated as a traditional contribution? Since they are no longer employer contributions, is that deductible up to my traditional limits?

"Excess contributions are included in the em­ ployee's income for the year and are treated as contributions by the employee to his or her SEP­IRA. For more information on employee tax treatment of excess contributions, see Pub­ lication 590­A."

https://www.irs.gov/pub/irs-pdf/p560.pdf Page 6

Thanks!

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