1. Has your SEP been amended for current
law?
Laws related to retirement plans change quite frequently.
You will need to change plan language and operation to keep
the plan within the law.
(More)
2. Is the business that the SEP covers the
only business you own?
Employees of other businesses you or your family members
own may have to be treated as employees when determining
who is an eligible employee under this SEP.
(More)
3. Are all eligible employees participating
in the SEP?
Any employee who is at least 21 years of age, was employed
by you for 3 of the immediately preceding 5 years, and
received compensation from you of at least $600 during the
year is eligible to participate in a SEP.
(More)
4. Are you determining each eligible
employee's compensation using the
definition in your SEP document?
Compensation used to determine contributions generally
includes all bonuses and commissions and is limited to
$275,000 for 2018.
(More)
5. Are contributions to each participant's
SEP-IRA a uniform percentage of the
participant's compensation?
Employer contributions to a SEP must be the same percentage
of compensation for each employee maintaining a SEP-IRA in
the plan.
(More)
6. Are SEP contributions to each
participant's IRA limited as required by
the Internal Revenue Code?
All SEP contributions must go to traditional IRAs set up for the
eligible employees and are limited to the lesser of 25% of
compensation or $55,000 for 2018.
(More)
For Business Owner’s Use
(DO NOT SEND THIS WORKSHEET TO THE IRS)
Every year it's important that you review the requirements for operating your Simplified Employee Pension (SEP)
plan. Use this checklist to help you keep your plan in compliance with many of the important rules. Click on
"(More)" in any of the questions for additional information (including examples) on how to find, fix and avoid each
mistake. See www.irs.gov/retirement and click on "Types of Retirement Plans" for Fix-It Guides, and other resources
for SEPs and other plan types.
If you answered “No” to any of the above questions, you may have a mistake in the operation
of your SEP plan. This list is only a guide to a more compliant plan, so answering "Yes" to each question may not
mean your plan is 100% compliant. Many mistakes can be corrected easily, without penalty and without notifying
the IRS.
■ contact your tax advisor ■ visit the IRS at www.irs.gov/retirement ■ call the IRS at 877-829-5500
This checklist isn't a complete description of
all plan requirements, and shouldn't be used as
a substitute for a complete plan review.
SEP CHECKLIST
SEP CHECKLIST
Publication 4285 (Rev. 8-2018) Catalog Number 37997E Department of the Treasury Internal Revenue Service www.irs.gov
