Simplified Employee Pension (SEP)
Tax-deductible contributions are made by the employer on behalf of all eligible employees and, if self-employed, their own retirement. SEPs are available to all employers.
- May be established up to the tax-filing due date, including extensions.
- All employees ages 21 or older who have worked in at least 3 or the preceding 5 years receive a contribution.
- Contributions are limited to 25% of compensation or $53,000.
- Contributions are made directly to an employee’s IRA.
- General rules regarding Traditional IRAs apply.