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Posted

An individual owned his own business as a sole prop for 5+ years.  No employees.  No retirement plan.

Within the past year, he switched to an LLC.  I'm not sure if he has a new EIN or not.

He also hired an employee after the LLC was created.

He would like to start a SEP, but would like to keep the new employee out, at least for a few years per SEP eligibility.  

But can he be immediately eligible taking account of his sole prop service?  Can a SEP count prior service with, in this case, the predecessor business entity?

Thank you

Posted

A SEP can count prior service with a predecessor employer.  I don't think you can use Form 5305-SEP, so you will have to use a prototype.  I know Schwab and John Hancock have a prototype SEP and some of the other custodians might have.

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