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:

• Lesser of 25% of compensation or $57,000
• 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)
• Contributions Worksheet for Employers to Mail in Contributions

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 Responsibilities:

• 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 copy
• No plan tax filings with the IRS

Withdrawals:

• If you turned 70½ prior to January 1, 2020: Minimum required distributions start at age 70½
• If you turn 70½ after January 1, 2020: Minimum required distributions start at age 72
• 10% early withdrawal penalty if under age 59½ (exceptions may apply)
• Taxed at ordinary income rate in year withrawal made

Further Details:

• Review the TD Ameritrade SEP IRA Guide for additional details
• Please refer to the IRS page on SEP IRAs for additional details