5% owners

[Guest Srobertson2]

I know a greater than 5% owner must take an RMD from a SEP IRA while still working and having reached age 70.5, but can they continue to make contributions?

[Belgarath]

Yes.

[ETA Consulting LLC]

Everyone must take an RMD from a SEP at 70 1/2 since the SEPs are treated as IRAs for all distribution purposes. They are not, however, treated as IRAs for Contribution purposes (so a Traditional IRA is the only vehicle that precludes you from contributing beyond age 70 1/2).

Good Luck!

[Belgarath]

SRobertson, you sent me the following question:

I have another question: Is serving on the board of directors and receiving income from the position considered being employed for the purpose of delaying RMD? He is retired from the institution. He is making a contribution to his Keogh as well.

A corporate director would not, in my experience, be treated as an Employee - see also Revenue Ruling 58-505. But ultimately this should be determinable by whether he receives his income on a W-2 or a 1099 - presumably it is the latter.