Statutory Employee

[Guest jim williams]

Can anyone confirm whether a sole proprietor who is a statutory employee and reports his W2 income on Schedule C is eligible to sponsor a SEP plan on his behalf? I'm assuming no since W2 income would not be considered earned income.

[PensionPro]

That W-2 income is considered earned income, and he can set up a plan for the sole proprietorship. Caution: there is an exception for full-time insurance salespersons.