SEP IRA

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Hello,

I was a W2 employee until April 2021 and contributed to employer sponsored 401k.
I became an independent contractor starting May 2021 for the same employer. Can I contribute to SEP IRA? If yes, upto how much can I contribute?

Thank you

OpeA1

Level 6

It depends on different thing, but here is what the IRS says:

"Contributions an employer can make to an employee's SEP-IRA cannot exceed the lesser of:

25% of the employee's compensation, or
$57,000 for 2020 and $58,000 for 2021 ($56,000 for 2019)

Note: Elective salary deferrals and catch-up contributions are not permitted in SEP plans.

If you’ve contributed more than the annual limits to an employee’s SEP-IRA, find out how to correct this mistake."

Above Reference and more information:https://www.irs.gov/retirement-plans/plan-participant-employee/sep-contribution-limits-including-grandfathered-sarseps

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SEP IRA

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