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SEP Plan FAQs - Terminating a SEP plan

Do I need to amend my SEP for the new law before I terminate it?

Generally, the IRS has not required employers to amend their SEPs for new law prior to termination. Check with your plan professional.


Do I have to fund my SEP in the year of termination?

SEPs can be terminated at any time. You can stop funding your plan once it is terminated.


What are the notification requirements when a SEP terminates?

When you terminate your SEP plan, it is a good idea to notify the employees that you are discontinuing the plan. You may need to notify the financial institution that you chose to handle the plan that there will be no more contributions and that you will terminate the contract or agreement with it. Do not notify the IRS of the plan's termination.


If I go out of business or my employee terminates service, can the amount in a SEP-IRA be left untouched?

Yes.

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Page Last Reviewed or Updated: 18-Aug-2014