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SEP IRA

SEP IRA: A flexible and easy to manage retirement plan

A Simplified Employee Pension (SEP) IRA is a retirement plan that allows for higher, tax-deductible contributions, tax-deferred growth, hassle-free account maintenance, and a flexible contribution schedule, making it a good choice for small business owners and self-employed individuals. 

SEP IRA plan details

Best For:
  • Self-employed individuals and small business owners
Tax Benefits:
  • Tax-deductible contributions for the business
  • Tax-deferred growth potential on contributions
Employee Contribution Limits:
  • Not applicable
Employer Contribution Limits:
  • 2022 Tax Year: Lesser of 25% of compensation or $61,000
  • 2023 Tax Year: Lesser of 25% of compensation or $66,000
  • Employer is not locked into making a contribution each year and can decide whether and how much to contribute to employees' accounts (Note: if employers do contribute, must contribute for all participants who are eligible for the plan)
Date Account Must be Opened By:
  • New account must be opened prior to the employer's tax return due date plus extensions (Tax return due date generally: April 15. Extension due date generally: October 15)
Funding Deadline:
  • Account must be funded prior to the employer's tax return due date plus extensions
Employer Administrative Responsibilites:
  • Notification to employees of employer contribution
  • Employer must complete and retain Form 5305-SEP or other plan documents in their records. Employees must receive a signed copy
  • No plan tax filings with the IRS
Withdrawals:
  • If you turned 70 1/2 prior to January 1, 2020: Minimum required distributions start at age 70 1/2
  • If you turn 70 1/2 after January 1, 2020: Minimum required distributions start at age 72
  • 10% early withdrawal penalty if under age 59 1/2 (exceptions may apply)
  • Taxed at ordinary income rate in year withdrawal made

Get in touch Call or visit a branch

Call us: 800-454-9272

175+ Branches Nationwide

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