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Official form guide
Form 5305-ASE: 5305-A-SEP
Internal Revenue Service Form 5305-ASE is used by employers to establish a Simplified Employee Pension (SEP) plan and to notify employees of excess SEP contributions. If the employer does not notify employees by March 15, a 10% tax applies.
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IRS Form 5305-ASE - 5305-A-SEP
Internal Revenue Service Form 5305-ASE is used by employers to establish a Simplified Employee Pension (SEP) plan and to notify employees of excess SEP contributions. If the employer does not notify employees by March 15, a 10% tax applies.
Risk Radar
Scan points- 1Missing the March 15 employee notification triggers a 10% tax penalty.
- 2Failing to notify employees of excess SEP contributions by the March 15 deadline.
- 3Omitting the required 10% tax payment when the March 15 notification is missed.
- 4Not specifying the calendar year the excess contributions are includible in gross income.
- 5Leaving out the April 15 withdrawal deadline for the excess contributions in the employee notice.
Plain English
This form lets a small business set up a SEP retirement plan for its workers. It also records any excess contributions and tells the employer when to tell employees they must withdraw the extra money.
Submission Date
- Filing date: 2012-07-17 00:00:00
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when you intend to permit elective deferrals to a SEP.
- Do not use it when you are a state or local government, a tax‑exempt organization, or you only want nonelective employer contributions.
- Check Form 5305-SEP instead when you want a SEP that permits only nonelective contributions.
Form selector
Use this form or another form?
Want a SEP that only allows nonelective employer contributions
Using Form 5305A-SEP would incorrectly allow elective deferrals
✓ Confirm you do not intend elective deferrals
Need to report excess SEP contributions tax
Excess contributions are subject to a 6% excise tax and require reporting
✓ Verify excess amount and applicable deadline
Reporting nondeductible IRA contributions related to SEP
Nondeductible contributions must be reported separately
✓ Confirm you have nondeductible amounts
Deadline or filing window
When excess SEP contributions are identified, the employer must notify each affected employee by March 15 of the following calendar year. The notice must require the employee to withdraw the excess by April 15 of the next year. No extension for this notification deadline is provided in the source.
Checklist
What you need before filling it out
Employer’s signature
Employer name and title · Signature block on page 2
Effective date
Adoption date and proof of IRA establishment · Article VII
Elective deferral contributions
Amounts deferred by employees · Section on elective deferrals page 2
Excess SEP contributions
Amount of excess contributions · Section on page 5
Top‑heavy contribution requirement
Section 416 calculations · Article VI
Before you submit
- 1Verify all blanks on the form are completed
- 2Confirm employer’s name and title are entered
- 3Ensure the employer’s signature is present
- 4Check the date field is filled
- 5Confirm you are not a state or local government or tax‑exempt organization
- 6Confirm elective deferral amounts are reported if applicable
- 7Do not file the form with the IRS; keep it in your records
- 8Calculate any excess contributions accurately
- 9Prepare Form 5329 if excess contributions require an excise tax
- 10Prepare Form 8606 if nondeductible IRA contributions are present
How to file this form
- 1Complete all required fields on Form 5305A-SEP
- 2Obtain employer signature and date on the signature block
- 3Retain the signed Form 5305A-SEP in your records (do not mail to the IRS)
- 4If excess contributions exist, file Form 5329 to report the excise tax
- 5If nondeductible contributions exist, file Form 8606 to report them
- 6Keep copies of supporting documentation as proof of filing
Known limitations
- 1Form 5305A-SEP cannot be used for SIMPLE IRA plans. (Form p.2)
- 2Form 5305A-SEP cannot be used for Roth IRA plans. (Form p.2)
- 3Adopting Form 5305A-SEP does not establish an employer IRA under section 408(c). (Form p.1)
- 4Form 5305A-SEP must not be filed with the IRS; it is kept for records. (Form p.2)
- 5If more than 50% of eligible employees decline elective deferrals, no employee may participate that calendar year. (Form p.7)
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->Form 5305A-SEP (Rev. 6-2006) is the current edition; the source does not indicate a more recent revision.
What changed or needs a fresh check
- Edition date — confirm the revision reads 6-2006
- Fee — Not stated in the official source
- Mailing address — Not stated in the official source
- Signature — confirm employer signature and date are filled
- Electronic filing — Not stated in the official source
Quick Facts
Downloads
After you file
- 1Retain the completed Form 5305A-SEP in employer records. (Form p.2)
- 2Do not mail the form to the IRS; it is kept for internal records. (Form p.2)
- 3If you fail to notify employees by March 15, a 10% tax is assessed and reported on Form 5330, Part VIII. (Form p.4)
- 4If excess contributions are not withdrawn by April 15, a 6% excise tax is assessed and reported on Form 5329, Part III. (Form p.6)
Sources
- SRCForm p.2 — Form 5305A-SEP cannot be used for SIMPLE IRA plans.
- SRCForm p.2 — Form 5305A-SEP cannot be used for Roth IRA plans.
- SRCForm p.1 — Adopting Form 5305A-SEP does not establish an employer IRA under section 408(c).
- SRCForm p.2 — Do not file Form 5305A-SEP with the IRS; keep it for records.
- SRCForm p.7 — If more than 50% of eligible employees decline elective deferrals, no employee may participate that calendar year.
- SRCForm p.4 — Failure to notify employees by March 15 triggers a 10% tax reported on Form 5330, Part VIII.
- SRCForm p.6 — Failure to withdraw excess contributions by April 15 triggers a 6% excise tax reported on Form 5329, Part III.
- SRCForm p.2 — Form 5305-A, Traditional Individual Retirement Custodial Account, is a model IRA option for SEP contributions.
- SRCForm p.4 — Form 5330, Part VIII, is used to report the 10% tax on excess SEP contributions.
- SRCForm p.6 — Form 5329, Part III, is used to report the 6% excise tax on excess contributions.
Common confusion points
Can I send Form 5305A-SEP to the IRS?
Many expect IRS filing like other tax forms.
→ Keep the form in your records and do not mail it to the IRS.
Is a SIMPLE IRA allowed under this SEP?
The form mentions IRA types but not which are permitted.
→ Verify that the plan is not a SIMPLE IRA; the form excludes SIMPLE IRAs.
Can I use a Roth IRA for SEP contributions?
Roth IRAs are mentioned alongside prohibited types.
→ Confirm the IRA is a traditional IRA, not a Roth.
When must I notify employees of excess contributions?
Deadline language can be missed.
→ Ensure notification is sent by March 15 of the year following the contribution.
When must excess contributions be withdrawn?
Withdrawal deadline may be confused with notification deadline.
→ Withdraw excess SEP contributions by April 15 following the notification year.
What penalty applies if I miss the March 15 notification?
Tax consequences are detailed in another form.
→ Expect a 10% tax reported on Form 5330, Part VIII.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 5305-SEP – keep this form for records; do not send to the IRS. (Form p.2)
Questions about IRS Form 5305-ASE
What is IRS Form 5305-ASE used for?
This form lets a small business set up a SEP retirement plan for its workers. It also records any excess contributions and tells the employer when to tell employees they must withdraw the extra money.
Who must file IRS Form 5305-ASE?
Employers who want to create a Simplified Employee Pension (SEP) plan must file IRS Form 5305-ASE.
What information does IRS Form 5305-ASE require?
The form records the deferral start date, the employee’s signature, and any notice of excess SEP contributions, including the amount and required withdrawal deadline.
How do I complete IRS Form 5305-ASE?
First, enter the commencement date of employee deferrals and obtain the employee’s signature. Next, complete the Notification of Excess SEP Contributions section, stating the excess amount, the calendar year it is includible in income, and the April 15 withdrawal deadline. Keep the completed form for records; the IRS does not require mailing it to a service center.
What happens if IRS Form 5305-ASE is filed incorrectly?
If the employer fails to notify employees of excess contributions by March 15, the employer must pay a 10% tax, and unwithdrawn excess after April 15 incurs a 6% annual excise tax.
Can I send Form 5305A-SEP to the IRS?
Many expect IRS filing like other tax forms. Keep the form in your records and do not mail it to the IRS.
Is a SIMPLE IRA allowed under this SEP?
The form mentions IRA types but not which are permitted. Verify that the plan is not a SIMPLE IRA; the form excludes SIMPLE IRAs.
Can I use a Roth IRA for SEP contributions?
Roth IRAs are mentioned alongside prohibited types. Confirm the IRA is a traditional IRA, not a Roth.
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