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Bri

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  1. I am plan on starting a SEP this year. I am a sole proprietor and the only employee and 71 years old.  I have had employees the last 5 years but sold my business and they are employed by the new company. Does the 3 out of 5 year rule apply to former employees even though they are not working for me now?    

    Thank you

    1. Bri

      Bri

      If they don't work for your 2023 company, they don't get covered.  If you still owned Company A, then setting up Company B's SEP, then you'd need to consider them.  But they don't get SEP contributions working somewhere completely now unrelated just because they had worked for you over the last five years. 

      I suppose if you just sold the company in 2023 there'd be more to double-check on.

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