topic 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? in Retirement tax questions

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 — Wed, 05 Jun 2019 22:41:20 GMT

Reference IRS URL:
dudafunk — Wed, 05 Jun 2019 22:41:22 GMT
Reference IRS URL: <a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/plan-participant-employee/who-can-participate-in-a-sep-or-sarsep-plan">https://www.irs.gov/retirement-plans/plan-participant-employee/who-can-participate-in-a-sep-or-sarsep-plan</a>

The answer depends on the requirements that you state wit...

dmertz — Wed, 05 Jun 2019 22:41:23 GMT

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