Jump to content

Changing SEP eligibility requirement

Guest rr2000

Recommended Posts

Prospect firm is looking to reduce 09 tax liability and currently has a SEP. 2 of the 5 employees are under 3 year eligibility requirement from existing Form 5305. Is it possible to amend an existing Form 5305 to lower eligibility down to 1 year on existing SEP or just setup new SEP with only 1 year requirement to allow funding for all 5 employees?

Link to comment
Share on other sites

There is no problem in amending the service requirement from 3 years to 1 year. The amendment should be effective on the first day of the plan year (1/1/09) and be executed by due date of business tax return. Employees must be notified of the amendment and its effect. A revised plan descriptiion should also be provided.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...