sar sepp sponsor changes to s-corp.

[Guest De Nollid]

I have a sole proprietor with a sarsepp who recently became an s-corp. Can his s-corp continue the sarsepp?

[Gary Lesser]

Yes, but it is based ONLY on his/her W-2 income. Not a bad idea to have the succesor entity readopt the plan. Notify all investment accounts/brokers and request a name change(if needed).

[Guest Shelton]

In this scenario, how does this affect employee eligibility? Will existing employee becomes immediately/atomically eligible, or will the same eligibility rules apply?

[Gary Lesser]

It doesn't. The employer hasn't changed, only its tax status. Service is service (prior, current, and future). [Assumes that the prior unincorporated trade or business no longer exists as a sole-proprietorship and there are no "related" emplyers to speak of.]

[Guest Shelton]

Thanks