Correct. Other than salary-reduction contributions to a SARSEP established before 1997, SEP contributions are employer contributions and employer contributions are not considered when determining the amount of a Retirement Savings Contributions Credit for which you might be eligible. However, distributions from the SEP-IRA are IRA distributions that would reduce the amount of the credit for which you might otherwise be eligible if you made a regular personal IRA contribution or an elective deferral to a qualified retirement plan like a 410(k).
