FAQs regarding SARSEPs |
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These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information required to respond to general inquiries. Due to the uniqueness and complexities of Federal tax law, it is imperative to ensure a full understanding of the specific question presented, and to perform the requisite research to ensure a correct response is provided.
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General
Participation
Definition of Compensation
Contributions
Distributions
Termination of Plan
Loans
Investments
Have a Question?
General
- What is a SARSEP?
- Could any employer establish a SARSEP?
- What are the requirements to maintain a SARSEP?
- If I have more than 25 eligible employees this year, but had less than 25 employees in the preceding year, may salary reduction contributions be made this year?
- What happens if less than 50% of my eligible employees make salary reduction contributions under the SARSEP?
- Are there any required notices to be given to employees/participants?
- What forms must be filed under a SARSEP?
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Participation
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Definition of Compensation
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Contributions
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Distributions
- What is a rollover?
- Can a SEP-IRA be rolled over into a qualified retirement plan (e.g., 401(k), profit-sharing, etc.)?
- Can a SEP-IRA accept rollovers from other plans?
- Are in-service distributions allowed from a SARSEP?
- Are hardship distributions allowed from a SARSEP?
- Must distributions be made to participants if they are over 70 1/2, if they are still working? What about to the owner of the company?
- How much do I have to take out of my IRA at age 70 1/2?
- If I make a withdrawal from an IRA before age 59 1/2, what forms do I need to fill out?
- Can the 10% additional tax for an early withdrawal from an IRA be deducted in the Adjusted Gross Income section of Form 1040 as a penalty on early withdrawal of savings?
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Termination of Plan
- What are the notification requirements to participants, etc. when a SARSEP terminates?
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Loans
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Investments
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Have a Question?
If I have questions concerning SARSEPs, where do I go for help?
You may direct your technical and procedural questions concerning retirement plans to us in a variety of ways.
Call:
TE/GE Customer Account Services at (877) 829-5500 (toll-free number).
Telephone representatives will provide assistance with basic EP questions such as basic filing requirements and due date for Form 5500, status of pending determination letter applications and responding to notices. Questions beyond the scope of our telephone representatives will be written up as a referral to be answered by an Employee Plans Specialist within 15 days.
In addition to your question, the following will be needed:
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Your name
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Telephone number
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Best time to call
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Address
You will be given a "reference number" that identifies the referral.
If you are calling regarding specific technical guidance (e.g., Revenue Procedure, Notice, Regulation), please indicate the specific guidance and its author and your request will be forwarded. Please be aware that telephone representatives are not permitted to give out e-mail addresses of IRS employees.
Write:
Internal Revenue Service
TE/GE Division, Correspondence Unit
P.O. Box 2508
Cincinnati, OH 45201
E-mail:
RetirementPlanQuestions@irs.gov
Due to disclosure laws, account-related questions cannot be answered via e-mail. If you are e-mailing regarding specific technical guidance (e.g., Revenue Procedure, Notice, Regulation), please indicate the specific guidance and its author and your request will be forwarded.
Note: All questions submitted via e-mail must be responded to via telephone, so please remember to include your phone number in your message.
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Page Last Reviewed or Updated: June 24, 2008