SEP IRA Contribution Limits for 2019 and 2020

SEP IRA Contribution Deadlines

The employer's tax return date plus extensions.

SEP IRA Information

A Simplified Employee Pension Plan (SEP) allows an employer to contribute on a tax-favored basis to IRAs owned by its employees. Under a SEP, a Traditional IRA is set up by or for an employee to accept the employer’s contributions.

How much can I contribute to my SEP IRA?

SEP employer contribution limits cannot exceed:

1. Up to 25% of compensation OR

2. $56,000 in 2019 ($55k in 2018)

	2019	2020
SEP Employer Contribution Limits	Up to 25% of compensation, with a maximum of $56,000*	Up to 25% of compensation, with a maximum of $57,000*
SEP Current Year Minimum Compensation Required	$600	$600

Eligibility for SEP IRAs

Any business, sole proprietor, partnership, or corporation is eligible.
Any employee that has reached age 21 and has worked for the employer in at least 3 of the last 5 years is eligible.

Other Important Information

Plan establishment and contribution can be made up until the employer’s tax return due date (plus extensions).
Employer contributions are discretionary and tax-deductible.
This plan is not subject to the reporting and disclosure requirements of most retirement plans.

SEP IRA Contributions for the Self-Employed

Calculating the SEP IRA contribution limit for self-employed persons is a bit more complex. Further details can be found in IRS Publication 560. Consult your tax advisor on this matter if it applies to you.

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SEP IRA Contribution Limits