dudafunk
New Member

Can an LLC (SMLLC/SP) less than 3 years old make SEP IRA contributions? According to IRS eligibility criteria, they state one must have worked for the LLC 3 of 5 years?

 
dudafunk
New Member

Retirement tax questions

dmertz
Level 15

Retirement tax questions

The answer depends on the requirements that you state with you establish the plan.  As stated in your reference, the 3-out-of-5 year requirement is the maximum service requirement that you can specify, however, you are permitted to establish less a restrictive service requirement such as zero years of service.

Most SEP plans are established using Form 5305-SEP.  The second blank on that form allows you to specify zero years of service as the service requirement, resulting in all employees (i.e., yourself in a SMLLC/SP) meeting the other eligibility requirements being participants.

https://www.irs.gov/pub/irs-pdf/f5305sep.pdf