Common use of Paperwork Reduction Act Notice Clause in Contracts

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to determine if you are entitled to a deduction for contributions made to a Simplified Employee Pension (SEP). Complete this form only if you want to establish a Model SEP. The time needed to complete this form will vary depending on individual circumstances. by an employee with a bank, insurance company, or other qualified financial institution. When using this form to establish a SEP, the IRA must be a model IRA established on an IRS form or a master or prototype IRA for which IRS has issued a favorable opinion letter. Making the agreement on Form 5305-SEP does not establish an employer IRA as described under section 408(c). This form may not be used by an employer who: ● Currently maintains any other qualified retirement plan. any work performed for any period of time for any other member of such group, trades, or businesses. Generally, to make the agreement, all eligible employees (including all eligible employees, if any, of other members of an affiliated service group, a controlled group of corporations, or trades or businesses under common control) must participate in the plan. However, employees covered under a collective bargaining agreement and certain nonresident aliens may be excluded if section 410(b)(3)(A) or 410(b)(3)(C) applies to them. Employees whose total compensation for the year is less than $363* may be excluded. The estimated average time is: ● Has maintained in the past a defined Amount of Contributions.—You are not Recordkeeping 7 min. Learning about the law or the form 24 min. Preparing the form 18 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form more simple, we would be happy to hear from you. You can write to both the Internal Revenue Service, Washington, DC 20224, Attention: IRS Reports Clearance Officer, T:FP; and the Office of Management and Budget, Paperwork Reduction Project (1545-0499), Washington, DC 20503. This form is NOT to be sent to either of these offices. The Form 5305-SEP is only to be kept for your records. Purpose of Form.—Form 5305-SEP (Model SEP) is used by an employer to make an agreement to provide benefits to all employees under a SEP described in section benefit plan, even if now terminated. ● Has any eligible employees for whom IRAs have not been established. ● Uses the services of leased employees (as described in section 414(n)). ● Is a member of an affiliated service group (as described in section 414(m)), a controlled group of corporations (as described in section 414(b)), or trades or businesses under common control (as described in section 414(c)), UNLESS all eligible employees of all the members of such groups, trades, or businesses, participate under the SEP. ● This form should only be used if the employer will pay the cost of the SEP contributions. This form is not suitable for a SEP that provides for contributions at the election of the employee whether or not made pursuant to a salary reduction agreement. required to make any contributions to an employee’s SEP-IRA in a given year. However, if you do make contributions, you must make them to the IRAs of all eligible employees, whether or not they are still employed at the time contributions are made. The contributions made must be the same percentage of each employee’s total compensation (up to a maximum compensation base of $222,220*). The contributions you make in a year for any one employee may not be more than the smaller of $30,000 or 15% of that employee’s total compensation (figured without considering the SEP-IRA contributions). For this purpose, compensation includes: ● Amounts received for personal services actually performed (see Regulations section 1.219-1(c)); and ● Earned income as defined under section 408(k). This form is NOT to be filed with IRS. Who May Participate.—Any employee who is 401(c)(2). What Is a SEP Plan?—A SEP provides an employer with a simplified way to make contributions toward an employee’s retirement income. Under a SEP, the employer is permitted to contribute a certain amount (see below) to an employee’s Individual Retirement Account or Individual Retirement Annuity (IRAs). The employer makes contributions directly to an IRA set up at least 21 years old and has performed “service” for you in at least 3 years of the immediately preceding 5 years must be permitted to participate in the SEP. However, you may establish less restrictive eligibility requirements if you choose. “Service” is any work performed for you for any period of time, however short. If you are a member of an affiliated service group, a controlled group of corporations, or trades or businesses under common control, “service” includes You may not discriminate in favor of any employee who is highly compensated if you use Form 5305-SEP. Under this form you may not integrate your SEP contributions with, or offset them by, contributions made under the Federal Insurance Contributions Act (FICA). Currently, employers who have established a SEP using this agreement and have provided each participant with a copy Form 5305-SEP (Rev. 6-91) of this form, including the questions and answers below, are not required to file the annual information returns, Forms 5500, employer to maintain a particular level of contributions. It is possible that for a given year no employer contribution will be made on an Also see Questions 11 and 12.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to determine if you are entitled to a deduction for contributions made to a Simplified Employee Pension (SEP). Complete this form only if you want to establish a Model SEP. The time needed to complete this form will vary depending on individual circumstances. by an employee with a bank, insurance company, or other qualified financial institution. When using this form to establish a SEP, the IRA must be a model IRA established on an IRS form or a master or prototype IRA for which IRS has issued a favorable opinion letter. Making the agreement on Form 5305-SEP does not establish an employer IRA as described under section 408(c). This form may not be used by an employer who: ● Currently maintains any other qualified retirement plan. any work performed for any period of time for any other member of such group, trades, or businesses. Generally, to make the agreement, all eligible employees (including all eligible employees, if any, of other members of an affiliated service group, a controlled group of corporations, or trades or businesses under common control) must participate in the plan. However, employees covered under a collective bargaining agreement and certain nonresident aliens may be excluded if section 410(b)(3)(A) or 410(b)(3)(C) applies to them. Employees whose total compensation for the year is less than $363* may be excluded. The estimated average time is: ● Has maintained in the past a defined Amount of Contributions.—You are not Recordkeeping 7 min. Learning about the law or the form 24 min. Preparing the form 18 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form more simple, we would be happy to hear from you. You can write to both the Internal Revenue Service, Washington, DC 20224, Attention: IRS Reports Clearance Officer, T:FP; and the Office of Management and Budget, Paperwork Reduction Project (1545-0499), Washington, DC 20503. This form is NOT to be sent to either of these offices. The Form 5305-SEP is only to be kept for your records. Purpose of Form.—Form 5305-SEP (Model SEP) is used by an employer to make an agreement to provide benefits to all employees under a SEP described in section benefit plan, even if now terminated. ● Has any eligible employees for whom IRAs have not been established. ● Uses the services of leased employees (as described in section 414(n)). ● Is a member of an affiliated service group (as described in section 414(m)), a controlled group of corporations (as described in section 414(b)), or trades or businesses under common control (as described in section 414(c)), UNLESS all eligible employees of all the members of such groups, trades, or businesses, participate under the SEP. ● This form should only be used if the employer will pay the cost of the SEP contributions. This form is not suitable for a SEP that provides for contributions at the election of the employee whether or not made pursuant to a salary reduction agreement. required to make any contributions to an employee’s SEP-IRA in a given year. However, if you do make contributions, you must make them to the IRAs of all eligible employees, whether or not they are still employed at the time contributions are made. The contributions made must be the same percentage of each employee’s total compensation (up to a maximum compensation base of $222,220*). The contributions you make in a year for any one employee may not be more than the smaller of $30,000 or 15% of that employee’s total compensation (figured without considering the SEP-IRA contributions). For this purpose, compensation includes: ● Amounts received for personal services actually performed (see Regulations section 1.219-1(c)); and ● Earned income as defined under section 408(k). This form is NOT to be filed with IRS. Who May Participate.—Any employee who is 401(c)(2). What Is a SEP Plan?—A SEP provides an employer with a simplified way to make contributions toward an employee’s retirement income. Under a SEP, the employer is permitted to contribute a certain amount (see below) to an employee’s Individual Retirement Account or Individual Retirement Annuity (IRAs). The employer makes contributions directly to an IRA set up at least 21 years old and has performed “service” for you in at least 3 years of the immediately preceding 5 years must be permitted to participate in the SEP. However, you may establish less restrictive eligibility requirements if you choose. “ServiceService ” is any work performed for you for any period of time, however short. If you are a member of an affiliated service group, a controlled group of corporations, or trades or businesses under common control, “service” includes You may not discriminate in favor of any employee who is highly compensated if you use Form 5305-SEP. Under this form you may not integrate your SEP contributions with, or offset them by, contributions made under the Federal Insurance Contributions Act (FICA). Currently, employers who have established a SEP using this agreement and have provided each participant with a copy Form 5305-SEP (Rev. 6-91) of this form, including the questions and answers below, are not required to file the annual information returns, Forms 5500, employer to maintain a particular level of contributions. It is possible that for a given year no employer contribution will be made on an Also see Questions 11 and 12.