Contribution Date for SEP
I have a question I am hoping someone can answer for me.
I have a client who is self employed and files a Schedule C and has a SEP. He has one employee who is eligible to participate in the SEP. The client extends his filing date to October 15. The client makes his and his employee’s SEP contribution in October but before he files his return on October 15th. The employee does not get an extension on her return and files by April 15th.
Example: For tax year of 2018, client is filing his return in October of 2019. Employee files her 2018 return in April of 2019. Client makes his and his employee’s 2018 SEP contribution in October of 2019 (before he files his return).
Are there any issues or problems with the fact that he makes his employee’s SEP contribution for the year after her return for the year is filed?
I would appreciate any input on this issue.
Permalink Submitted by Alan - IRA critic on Thu, 2019-10-03 22:52
No issues here. A SEP contribution is an employer contribution, so only the employer must file an extension to make the contribution after the normal due date. The employee can file by the normal due date, file an extension, or do neither and it does not affect the SEP contribution made by the employer.