SEP IRA

[cpabsd]

I know a SEP IRA can be transferred to another IRA account tax free.  Is there any length of time the SEP IRA has to be in existence before such transfer can occur?  

[JohnH]

It's my understanding that the SEP IRA becomes the property of the recipient the moment the money goes into the account.  The recipient is then free to do with it what they wish, which would be to leave it there, transfer it to another IRA, or withdraw it (incurring the appropriate penalty and tax of course).  But I don't have a cite, so maybe someone else will jump in if there is a need for clarification. 

I did have a client one time who would put money into SEP plans for himself and his employee, and each time the employee would withdraw the money the very next day & spend it. The plan trustee never balked at doing this.

[jklcpa]

 

4 hours ago, cpabsd said:

I know a SEP IRA can be transferred to another IRA account tax free.  Is there any length of time the SEP IRA has to be in existence before such transfer can occur?  

 

SEP-IRA withdrawals and distributions follow the same rules as traditional IRAs.  There are no restrictions on taking the funds. As soon as the funds are contributed into the account for the employee, the employee is immediately fully vested at 100%.  There are the same limits on # of rollovers during the year.