employer sep contribution

[Unregistered]

I know sep contributions are not included in wages, s/s but how about from medicare wages. Are they exempt also?

[Matt Sova]

SEP Contributions

SEP contributions are paid by the employer for the employees benefit and are not includable anywhere on the W-2.

401k, SIMPLE, SAR-SEP amounts are deducted from the employees pay and are included in SS and MED wages.

[Unregistered]

thanks Matt
fyi, if contribution is made before year end, its included in box 14 on w2 & retirement box is checked.

there is also code f, box 12, elective deferrals to 408k sep which is what my client received. He is over the ss limit and the difference between wages & medicare wages is the sep. Has anybody seen this?

[Matt Sova]

408k

Code f in box 12 is for the old SAR-SEP. Since 1997 you cannot start one of these, however, if you had one in place prior to 97 you can continue with it. I personally liked the SAR-SEP much better than the SIMPLE plan that has replaced it. It was a lot less restrictive.

But I digress, the contributions to a SAR-SEP are made by the employee and are treated, for W-2 purposes, just like 401k, 403b and SIMPLE contributions reducing Federal and State wages, but not SS & Medicare.

Matt

[stern100]

Matt, Thanks for the info, that's a big help.
It is definetly not a sarsep, but a screw-up.