Discussion:SEP-IRA and Forms 940, W-2

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Discussion Forum Index --> Basic Tax Questions --> SEP-IRA and Forms 940, W-2
Discussion Forum Index --> Tax Questions --> SEP-IRA and Forms 940, W-2

Txtravlr384 (talk|edits) said:

29 January 2008
When considering a C-Corporation that has an active SEP-IRA retirement plan, for the FUTA Tax Return, are SEP-IRA contributions included in "Total payments to all employees" (Line 3, 2007 Form 940) and thus, also included in "Payments exempt from FUTA tax" (Line 4, 2007 Form 940)?

Also, regarding the SEP-IRA, is the "Retirement Plan" checked in box 13 on Forms W-2 for employees that were eligible for the SEP-IRA plan?

I have found no specific information in any IRS document or online forum that specifically mentions SEP-IRAs in this regard.

Uncle Sam (talk|edits) said:

29 January 2008
A SEP-IRA plan is strictly an employER funded plan. There is NO employee deferral. The contribution is an employer expense.

Therefore, there is no W-2 adjustment to consider and does not effect FUTA. Yes, box 13 is checked, as it's an employer sponsored plan.

Txtravlr384 (talk|edits) said:

29 January 2008
I appreciate the response, Uncle Sam, and am in agreement regarding box 13 on the W-2s. But I was thrown when reading the instructions for 2007 Form 940 Line 3:

"...Include: ...Retirement/Pension, such as: -Employer contributions to a 401k plan, payments to an Archer MSA, payments under adoption assistance programs, and contributions to SIMPLE retirement accounts (including elective salary reduction contributions). -Amounts deferred under a non-qualified deferred compensation plan."

From what I read, if an SEP-IRA is considered a retirement or pension plan ("Include...Retirement/Pension") it should be included. The instructions don't say "SEP-IRA" directly, but doesn't it fall into this category of Retirement/Pension? Or am I missing something in the instructions that excluded SEP-IRAs.

JR1 (talk|edits) said:

January 30, 2008
don't read the instructions would be my advice. If that's what it says, then it's wrong. I'll go out on that limb. The only part reportable in payroll forms are the employee deferrals.

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