hard · Certified Financial Planner Tax Planning
The Fenwick family owns a business that uses a SEP IRA for retirement benefits. They hire a part-time employee who earns $1,200 in 2026.
Which of the following is true regarding this employee's eligibility for a contribution?
- The employer can exclude the employee if they have worked for the firm for only two of the last five years.
- The employee must be included in the plan because their compensation exceeds $800.
- SEP IRA contributions are only required for employees working more than 1,000 hours.
- The employee is excluded because they did not earn at least $5,000.
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