I recently discovered I miscalculated my max contribution to my SEP for 2019 and 2020 so I MAY have excess contributions in 2019 and 2020. See What is the contribution limit for self-employed person to their SEP-IRA? for details.

Certainly my deduction was too high for 2019 and 2020 so I should file amended returns for those. However, in trying to figure out wtf forms I'm supposed to file and penalty taxes to pay, it occurred to me that instead of treating them as excess, I may be able to treat my contribution made in FY2020 (NB: as a single deposit) originally for TY2019 as partly for TY2019 and partly for TY2020, and likewise the FY2021 contribution as partly TY2020 and partly TY2021. (Of course with some adjustment in TY2020 due to rollover from TY2019.) Does this seem legit so I can avoid any penalties and just pay the increased tax due to my excess deduction?


The IRS requires contributions to a SEP-IRA to be reported on the Form 5498 for the year they are actually deposited to the account, regardless of the year for which they are made.

In form 5498 instructions:

Show SEP (box 8) and SIMPLE (box 9) contributions made in 2022, including contributions made in 2022 for 2021, but not including contributions made in 2023 for 2022

So the brokerage doesn't report which tax year a contribution is for, only when the contribution was made.

In my proposal, I won't be taking any excess contributions out, so I won't even need to contact the brokerage.

Here are some example numbers. I made the SEP contributions of 25000 and 23750 in 2020 and 2021 (before my filing deadline), and I haven't filed for 2021 yet.

Year SE Income SE tax Net income Actual SEP cont (25% of SE income) True maximum (20% of net income) Carryover
2019 100000 14130 92935 25000 18587 6413
2020 95000 13423 88289 23750 17657 12506
2021 90000 12717 83642 4222 (new) + 12506 (carried) 16728

Edit: Pub 560 (referenced by the accepted answer) probably does answer my question pretty definitively. Although it doesn't mention amending previous returns, it says:

Carryover of Excess Contributions

If you contribute more to a plan than you can deduct for the year, you can carry over and deduct the difference in later years, combined with your contributions for those years. Your combined deduction in a later year is limited to 25% of the participating employees' compensation for that year. For purposes of this limit, a SEP is treated as a profit-sharing (defined contribution) plan. However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. See Deduction Limit for Self-Employed Individuals, earlier. The amount you carry over and deduct may be subject to the excise tax discussed next.

And because it came up in the comments, there's also this bit in Pub 560:

When Contributions Are Considered Made

You generally apply your plan contributions to the year in which you make them. But you can apply them to the previous year if all the following requirements are met.

  1. You make them by the due date of your tax return for the previous year (plus extensions).
  2. The plan was established by the end of the previous year.
  3. The plan treats the contributions as though it had received them on the last day of the previous year.
  4. You do either of the following. a. You specify in writing to the plan administrator or trustee that the contributions apply to the previous year. b. You deduct the contributions on your tax return for the previous year.
  • It'd be up to your brokerage, and although likely possible soon afterward (i.e. April 15, 2020), I doubt it would still be possible now.
    – Craig W
    May 11, 2022 at 3:12
  • Thanks, I updated the post with some instructions that seem to indicate that the brokerage doesn't know or report what year the contributions were for, only when they were made. May 11, 2022 at 4:04

2 Answers 2


this is a great idea. I am pretty sure you can do the carryover as you proposed; see Pub 560, under the heading "Carryover of Excess SEP Contributions", as well as Table 4-1 "Carryover of Excess Contributions Illustrated—Profit-Sharing Plan" (which I just learned about from researching your question, so thank you).

If your carryover is always less than your subsequent year's 20% * (profit - SE tax) limit, then I'm confident you won't owe the 10% additional tax on nondeductible contributions, since you still take the full deduction of these contributions. (If your carryover were more than your 20% * (profit - SE tax) limit, you wouldn't be able to deduct the excess and would have to pay the 10% tax, which is apparently figured on Form 5330.)

  • But again I only just learned about this today, and obviously none of this is tax advice :) We would love to know what you do and how it goes.
    – user106227
    May 12, 2022 at 3:54

A SEP contribution made between Jan. 1 and Apr. 15 can be applied to the current year or the previous year. My brokerage (Fidelity) does not ask and doesn't appear to care the year to which it applies.

I suspect that IRS regulations don't cover the scenario where you make a single payment and you would like to split that payment between the current year and the previous year. Though it seems reasonable since it shouldn't matter whether you do one money transfer or two.

The idea to amend your tax returns to fix your over contributions is worth investigating though I have no idea how the IRS would react to this.

One problem though is that you would need to push some of your 2019 contribution to 2018 so you would need to amend your 2018 tax return. If you filed your 2018 tax return before May 2019, then it looks like you are past the 3-year window and cannot amend.

  • Fortunately tax year 2019 was the first year for my SEP so I'm still in the window. I agree IRS doesn't care about one payment or two - the form 5498 actually doesn't even have dates on it. So there's no way for the IRS to know from that whether a contribution even happened before or after the deadline. I think they'd have to audit you to know that. May 11, 2022 at 14:12
  • Agreed that Form 5498 does not report the intended year of contribution. From From 5498 instructions for box 8: "Trustees and issuers are not responsible for reporting the year for which SEP contributions are made". I found a discussion about your situation here -- the upshot is that the IRS might realise you're circumventing the rules.
    – user106227
    May 12, 2022 at 3:23
  • That is the thread that gave me the idea. :) May 12, 2022 at 3:54

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