SEP Contribution for 2019. When does SEP need to be established.

[Ken_BenefitScape]

Can a 2019 Contribution be made to a SEP that has not yet been esablished?

We intend to set up a plan for an employee before July 15, 2020 and make a contribution.

Can we postpone to OCT 2020 if we elect an extension?

Comments?  Thnak you!

Ken Phillips

[Belgarath]

You may find this useful.

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-establish-a-sep

[Larry Starr]

19 hours ago, Ken_BenefitScape said:

Can a 2019 Contribution be made to a SEP that has not yet been esablished?

We intend to set up a plan for an employee before July 15, 2020 and make a contribution.

Can we postpone to OCT 2020 if we elect an extension?

Comments?  Thnak you!

Ken Phillips

I worry about the language you used.  First, Belgrath sent you to the IRS FAQ, but the simple answer is: You can set up a SEP plan for a year as late as the due date (including extensions) of your business’s income tax return for that year.

Second, you cannot set up a SEP "for an employee".  You set it up for the employer and all eligible employees have to get the contribution.  You did not give us information about the employee makeup so we have no idea if you have only one employee who is eligible, but you need to understand the SEP rules, so make sure you are aware how they work.