TN 10 (09-90)

Citations:

Act, Sec. 209(a)(4)(H).

A. INTRODUCTION

Under a SEP plan an employer contributes to an employee's individual retirement account or individual retirement annuity (IRA), subject to the conditions of sec. 408(k) of the IRC.

B. POLICY

1. From January 1, 1978 Through 1983

Employer (but not employee) contributions to IRA's were:

• Wages for Social Security purposes; i.e., they were counted for computation and annual earnings test purposes, but

• Not wages subject to FICA.

2. Beginning January 1, 1984

Employer contributions are not wages for Social Security purposes.