Terminate 401k Mid-Year and the fund SEP-IRA

[Chris Thomas]

I know you are not able to maintain a 401k and SEP IRA at the same time using SEP Form 5305.  However, if you terminated the 401k on 6/1/2019 (short-plan year) - could the employer then open and fund a SEP-IRA for 2019?   

Some additional facts particular to this question: there was only 1 employee  (in addition to the owner).  The employee left first half of the year and the owner did not want to continue the admin and expense of the safe-harbor 401k therefore provided notice, distributed assets and terminated the 401k 6/1.    It is now just the owner as the only employee. 

If the answer to the first question above is yes.   How would the SEP contribution limits be calculated for the owner being that he made deferrals to the 401k for the first half of the year and received SH matching contributions?    

Thank you in advance!