SEP IRA for Church

[R. Butler]

Church personnel policy references making a SEP-IRA contribution for the minister, but no other church employee. I have not seen the actual SEP document, but I don't see that they even a church can do that within a SEP. Am I missing something?

Thanks in advance for any guidance.

[ETA Consulting LLC]

You're not. A SEP does not contain language to exclude employees and still pass coverage because the entire notion of coverage testing does not exist. Hence, if the church wants to exclude employees and still pass non-discrimination rules, they should use a vehicle that provides for it; the most flexible being a 403(b). If the minister is a NHCE, then you may even do a one-person 401(k) plan. But, a SEP; I cannot see.

Good Luck!