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February 23, 2009

Employer

Your Guide

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Definition

An employer is usually the plan sponsor, i.e. the party that adopts the retirement plan. This includes sole-proprietorships, partnerships, corporations and non-profit organizations.

An employer typically has hirees  who perform any service, of whatever nature, as an employee. A sole proprietor is treated as his or her own employer for retirement plan purposes.

A partner is not an employer for retirement plan purposes.  Instead, the partnership is treated as the employer of each partner.

Referring Cite

IRC § 414, Publication 560

Additional Helpful Information

  • For employer-plan purposes, the employer can be more than one businesses, if there is a controlled group relationship or affiliated service group relationship between the businesses.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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