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How does Secure 2.0 Act affect SEP-IRA to Roth IRA conversion?

I am a 1 person business. Before 2023, I had been contributing to SEP-IRA and convert the money to Roth IRA each year.  I have heard there are some changes with the Secure 2.0 Act that allow a Roth SEP IRA.  My brokerage doesn't seem to offer such a product.  I am a little confused how Secure 2.0 Act affect things.


I also take advantage of the backdoor Roth IRA conversion for my Traditional IRA contribution each year.



1 Reply
Employee Tax Expert

How does Secure 2.0 Act affect SEP-IRA to Roth IRA conversion?

Here is what SECURE 2.0 says:

Title VI – Revenue Provisions Section 601, SIMPLE and SEP Roth IRAs. Generally, all plans that allow pre-tax employee contributions are permitted to accept Roth contributions with one exception – SIMPLE IRAs. 401(k), 403(b), and governmental 457(b) plans are allowed to accept Roth employee contributions.

Section 601 allows SIMPLE IRAs to accept Roth contributions too. In addition, aside from grandfathered salaried reduction simplified employee pension plans, under current law, simplified employee pension plans (“SEPs”) can only accept employer money and not on a Roth basis. Section 601 allows employers to offer employees the ability to treat employee and employer SEP contributions as Roth (in whole or in part). The provisions in Section 601 are effective for taxable years beginning after December 31, 2022.




It takes time for IRA custodians and employers to allow such contributions.

You should check with your current brokerage company as to when it will be available or locate other brokerage companies that are ready.

Hope the above helps. Thanks for posting the questions.

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