Transfer Sep IRA to Traditional

[Twostates]

Is there a taxable event transferring SEP IRA to Traditional IRA?

Is earned income required to make this transfer?

[Mike9241]

How Transfers Work
Trustee-to-trustee transfer. when you use a trustee-to-trustee transfer, all you do is instruct the trustee of your SEP IRA to send the sum you want to move to another traditional or Roth IRA account.

Rollovers. Alternatively, you can do a rollover by withdrawing the money and depositing it in the new account yourself. You have 60 days from the time you remove funds from the SEP IRA to deposit them in the new account, or the IRS will count the amount as a distribution subject to taxes and perhaps trigger a 10 percent early withdrawal penalty. Also, unless you elect the trustee-to-trustee method, 10 percent of the money normally is withheld for taxes.  (you would have to make this up personally otherwise you would have a taxable distribution) 

SEP IRA Transfers and Taxes
If you transfer money from a SEP IRA to a traditional IRA, the funds keep their tax-deferred status, so there are no tax consequences. That isn't the case if you move money to a Roth IRA. Everything that goes into a Roth must be after-tax, so you have to pay income taxes on the pre-tax SEP IRA funds.

you don't need any earned income for this purpose. 

[dmertz]

For a distribution paid to you from an IRA, 10% is the default withholding.  You have the option to decline withholding or to have more than 10% withheld.  A trustee-to-trustee transfer (nonreportable) is generally the best choice, but if you want to do a distribution and rollover instead of doing a trustee-to-trustee transfer, request that no taxes be withheld if you will be rolling over the entire distribution.

If doing a trustee-to-trustee transfer, it's generally best to initiate the request at the receiving custodian so that they can tell the original custodian the proper way to transfer the funds.