A SEP is not the same as Simple IRA, but they are similar.  If he did a direct rollover or took a distribution and deposited the funds in the SEP within 60 days, then it is not taxable for federal or state.  He should have received a 1099-R, which will have to be reported, but just be sure to answer the question "What did you do with the money?" properly.  See screen shots below.