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Doublehill

SEP IRA question

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Hello all.  I have a question regarding SEP IRAs.  My current employer provided all of their employees with a SEP account.  We have small contributions made monthly, and once taxes and profits are figured for the year, we usually get a larger contribution around March that brings total contributions to 25% of gross income.  
 

I will be leaving said employer in a few days and wanted to make sure I’m eligible.  I worked the entire year, as well as the previous 4.  My only concern is that they are using the monthly disbursements and a work around in case someone leaves.  Any input? 

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Remarkably opaque.

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14 hours ago, Doublehill said:

Hello all.  I have a question regarding SEP IRAs.  My current employer provided all of their employees with a SEP account.  We have small contributions made monthly, and once taxes and profits are figured for the year, we usually get a larger contribution around March that brings total contributions to 25% of gross income.  
 

I will be leaving said employer in a few days and wanted to make sure I’m eligible.  I worked the entire year, as well as the previous 4.  My only concern is that they are using the monthly disbursements and a work around in case someone leaves.  Any input? 

You need to ask your employer, and I suggest you do so in writing. It appears you are asking about the 2019 year contribution made in 2020.  Since it appears you were still employed on 12/31/19, there is no reason to expect you should not be treated just the same as any other employee who was there on 12/31.  The fact that you terminate in 2020 should NOT affect the employer contribution due to you for 2019. 

We have absolutely no idea what you are talking about when you say "they are using the monthly disbursements and a work around in case someone leaves".

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It does not matter if you were employed on 12/31 or not. A SEP IRA can not have a last-day-of-the-year employment requirement. As an eligible participant it does not matter when you separate employment. The employer must base your 2019 contribution on your 2019 compensation. You will even be entitled to a contribution for 2020 based on the amount of 2020 compensation.

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