This
function returns the 408(k)(2)(C) SEP Minimum Compensation dollar amount for a
given year. A Simplified
Employee Pension (SEP) plan provides business owners with
a simplified method to contribute toward their employees' retirement as well as
their own retirement savings. Contributions are made to an Individual
Retirement Account or Annuity (IRA) set up for each plan participant (a
SEP-IRA). SEPMin is the compensation requirement for the definition of a
participant in a SEP.
SEPMin for year 𝑥 is based on the following formula:
|
Where 𝐶𝑃𝐼𝑦𝑒𝑎𝑟
is the “3rd quarter CPI” (sum of
the CPI-U for the months of July, August, and September) in the given year.
(September CPI is usual published around October 13.) If the amount so determined is not a multiple of $5,000,
it is rounded to the nearest multiple of $50. Not less than the amount for
the prior year. Note: ·
Prior to 1987 there was no
amount. ·
From 1987 through 2001, the amount was $300, indexed for the increase in 4th quarter CPI ($50 rounding increment). |
Syntax
SEPMin (DeterminationYear, [LawYear],
[Inflation])
|
Parameter Name |
Description |
|
DeterminationYear |
A
4 digit number, or an optional text value as shown in the table below. If the
DeterminationYear is after the LawYear, this is a projected
calculation based on the Inflation assumption. Click to view various options for the DeterminationYear parameter. |
|
LawYear |
A
4 digit number. |
|
Inflation |
The
assumed rate of inflation: the IRS
Cost-of-Living Adjustment for future years, as measured by the
year-over-year increase in CPI-U. This
is used only for a projected calculation. Optional:
default = 0% |