RTINSKY

Thank you so much. You have helped me greatly. Have a wonderful day.

That may not be clear. He started the LLC in Oct, 2013. He didn't buy the assets and start operating the current business inside the LLC until June 2014. The LLC is electing the SEP.

Actually, the company was started in Oct 2013 and he did not buy the assets of the business until June, 2014. So, the employee didn't start working for him until June 2014. He didn't have any income in the business until he bought the company, but was active in pursuing business interests from Oct 2013 until he purchased the assets and started running the business. The time from Oct would count towards his qualifying time, would it not?

It helps a lot. From you answer I deduce that if I am talking about making a contribution for 2015, then for him to be eligible, he needs to make the requirements 2 years, which would be 2013 and 2014. Is that correct? He wants to establish and contribute for 2015.

I have a single owner LLC that files as a sole proprietorship. The LLC has been in existence for 3 years. It purchased the assets of a going business 2 years ago. He had no employees prior to the purchase. If the qualifications are 3 out of the last 5 years, is the owner the only qualified person? If so is it top heavy? If it is top heavy, and he wants to contribute 25 % for himself, how much does he contribute for employees and do they have to meet the qualifications of a participant or is it for all employees that worked? He does have 1 employee that came from the purchased company that is still with him.