One Year of Service

[Dazednconfused]

SEP has elected one year of service out of the preceding 5 years, if hired in 2010 and worked any hours, would that person become eligible in 2010 or 2011 for contributions? I think they would become eligible for contributions in 2011, if they work that is..

Thanks,

[Bird]

Correct, first eligible to receive a contribution in 2011.

[Dazednconfused]

Correct, first eligible to receive a contribution in 2011.

One more follow up, if the person earned $10k in 2010, then in 2011 earned below the $550 comp limit, they would not be eligible for a contribution in 2011 correct?

Thanks again!

[Belgarath]

Depends upon how they completed the 5305-SEP form. There's an option to either include or not include those folks under the comp limit.

[Dazednconfused]

Depends upon how they completed the 5305-SEP form. There's an option to either include or not include those folks under the comp limit.

Yes, it is drafted to exclude under the limit, so even if they are participant and met elig. requirements in 2010, and under the comp limit, they can be excluded for contributions for 2011 I think I got it (more use to the DC world sorry for the simple questions time to go buy a book I guess..)

Take care.