SEP Contributions after 70-1/2

[Guest Randy Ehle]

May a SEP-IRA holder receive an employer contribution to the SEP after age 70-1/2 if he/she is still employed?

[Michael Devault]

Yes, if the employee is still employed at or after age 70-1/2, the employer is required to contribute to their SEP on the same basis as other qualified employees.

The bad news is that the contribution and earnings must be taken into consideration in determining the amount of required minimum distributions for the following year. The IRA account value on the preceding December 31 is used to determine the RMD, and the account would include any SEP contributions and earnings thereon.

Now you know why the call it the Code! Hope this helps.