Forums Solo 401k Rollover Funds into Solo 401k Rollover SEP IRA

  • Rollover SEP IRA

    1 Reply
  • Top SubjectRollover Funds into Solo 401k
    Top ForumsRollover Funds into Solo 401k

    Eric Yount
    Top SubjectRollover Funds into Solo 401k

    February 6, 2022 at 12:53 pm

    I have mysolo401K Non-Protype sub accounts set up at Fidelity where I also have a SEP IRA that I no longer contribute to. Can I rollover the SEP into the my solo 401K and would it be rolled over into the pre-tax or after tax sub account and would this trigger a taxable event ?

  • Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions
    Top ForumsSolo 401k, Solo 401k Contributions

    Mark Nolan

    Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions

    February 8, 2022 at 10:13 am

    Yes a SEP IRA may be directly rolled over to the pretax solo 401k.

    A direct rollover is the direct movement of cash or assets from a SEP IRA to a 401k including a solo 401k.

    If funds are being directly rolled over, the SEP IRA custodian will issue the check in the name of the receiving 401k or solo 401k.

    SEP IRA holdings are never deposited in your personal bank account under a direct-rollover. This means the SEP IRA funds are not first deposited to your personal bank account and then subsequently to your solo 401k.

    The 60-day rollover rule does not apply.
    The SEP IRA custodian does not perform any tax withholding because there is no taxable distribution.

    Fidelity will require their SEP IRA transfer form filled out which we can complete for our clients.

    Lastly, if the solo 401k brokerage account is also at Fidelity, the SEP IRA can be moved over internally to the solo 401k so that the funds never leave Fidelity.

Related Blog Posts