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Who can open a SEP IRA and make contributions?

A SEP is specially designed for self-employed people and owners of small businesses. You may hold an account if you are:

  • Self-employed
  • Self-employed business owner
  • Employee of a self-employed business owner

Only the self-employed individual or self-employed business owner makes contributions to a SEP IRA account. The employees do not make contributions.

If you are in a partnership, for retirement plan purposes, each partner or member of an LLC taxed as a partnership is an employee of the partnership. This is because only an employer can maintain and contribute to a SEP plan for its employees.