Simple Plan Checklist (Page 2 of 2) in pdf

years of age, was employed by you for 3 of the immediately preceding 5 years, and

received compensation from you of at least $550 during the year (subject to cost of living

adjustments) is eligible to participate.

Is the business that the SEP covers the only one that you and/or your family members

own? Employees of other businesses you and/or your family members own may have to be

treated as employees when determining who is an eligible employee under this SEP.

Are SEP contributions to each employee's IRA limited as required by law?

Contributions to a SEP-IRA are limited to the lesser of 25 percent of the employee's

compensation for the year, or $51,000 each for 2013 (up from $50,000 in 2012) subject to

cost-of-living adjustments for later years.

Are employer contributions immediately 100 percent vested? Employer contributions

cannot be conditioned on anything. Once made, the employee owns all contributions.

Are contributions made only to a traditional IRA? All SEP contributions must go to

traditional IRAs set up for the eligible employees.

If required, have you made top-heavy minimum contributions? If a SEP is top-heavy

or deemed top-heavy, contributions must be made for the non-key employees equal to the

lesser of 3% of compensation or a percentage equal to the highest contribution rate of any

key employee.

Have you deposited employer contributions timely? Employers have until the due date,

including extensions, of their tax return to deposit employer contributions in order to

obtain a deduction.

Are you determining each eligible employee's compensation using an appropriate

definition in accordance with your SEP document? For 2013, compensation used to

determine contributions is limited to $255,000 for each year and subject to cost-of-living

adjustments in later years (up from $250,000 for 2012).

Have you given all eligible employees information about the SEP? You must give

employees certain information, including a copy of the SEP document. Form 5305-SEP is

your SEP document if you use the model form.

If the model Form 5305-SEP was used to set up the plan, is this SEP your business's

only employee retirement plan? A sponsor of a SEP established using model Form 5305-

SEP cannot sponsor another retirement plan, such as a 401(k) plan.

Simple Plan Checklist Page 2