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Level 2
posted Feb 5, 2021 11:51:25 AM

Can an employer contribute to two separate sep ira acounts for emplyees?

My S corporation (one employee/officer) has two separate sep accounts set up.  Is it possible to contribute to both accounts in the same year as long at total contributions don't exceed limits?

0 2 1492
2 Replies
Level 15
Feb 5, 2021 12:10:43 PM

Yes.  It doesn't matter what SEP-IRA owned by an individual employee receives the SEP contributions.  SEP-IRAs are owned by the individual, so all of the SEP-IRAs owned by the individual can be thought of in aggregate as if they were a single SEP-IRA.  However, splitting the SEP contributions required to be made for a particular employee could create an accounting headache, particularly if the SEP plan is managed by a third party such as a payroll processing firm.

 

You can't have two different SEP plans at the same time, though.  Eligibility requirements and the contribution rate as a function of compensation for all eligible employees must be the same.

Level 2
Feb 5, 2021 12:27:09 PM

Thank you!  I thought that this was the case, but couldn't find a definitive answer anywhere.