SEP IRA and W-2 Box 13

[NotEasy]

I have a client whose company made SEP-IRA contribution for him in 2009 (15% of his salary). But on his 2009 W-2, they did not check the 'retirement' in box 13. Is it a mistake?

[Uncle Sam]

SEP IRA - No W-2 checkbox

Yes it is a mistake.
The purpose of the box is to disclose whether the employee participates in any form of employer plan or employee deferral.

[NotEasy]

Yes it is a mistake.
The purpose of the box is to disclose whether the employee participates in any form of employer plan or employee deferral.

Thanks. The problem is my client may use it to argue that he should be able to make individual IRA contribution too since he is not considered an active participant according to his W-2. It's going to be an uphill battle for me to fight in order to convince him that he cannot do that. *sigh*

[Uncle Sam]

Sep/ira

If the employee has the opportunity to participate, but doesn't - that is still considered "participating" for checking the box purposes.
The whole purpose of it is to ensure that if an employee is covered under an employer plan, he/she doesn't also have the opportunity to put away money in an IRA also - as there ARE restrictions has to how much, if at all, IRA contributions can be made.
It's dependent on AGI and age as well.