Can I Have More Than One SEP IRA? Rules, Limits, and Fixes

Yes, you can have more than one SEP IRA. Federal tax law lets you hold SEP IRA accounts at several financial institutions for the same business, and if you own truly separate businesses, you can maintain a distinct SEP plan for each with its own contribution limit. What you cannot do is use multiple accounts or multiple plans to escape the contribution cap that applies to a single employer.

Multiple Accounts Under One Business

Nothing in the tax code requires every SEP IRA under a plan to sit at the same custodian. The IRS confirms that the law does not require all participants’ accounts to be held in one place, though the institution administering the plan may require initial deposits to move through its own accounts first.¹ Splitting money across custodians can help you diversify investments or access different fee structures.

The constraint is on paper, not accounts. All of those SEP IRAs must operate under a single plan document adopted by the employer. The written plan governs how contributions work no matter how many accounts hold the money, and you cannot adopt a second plan document for the same business to double up on contribution room or loosen eligibility.

Separate SEP Plans for Separate Businesses

Owning more than one business is where a second SEP plan becomes possible, but only if the businesses are genuinely independent. Under federal tax law, businesses under common control are treated as a single employer for retirement plan purposes.² The same rule applies to affiliated service groups, where businesses share management, facilities, or key personnel. When the IRS treats your businesses as a single employer, every eligible employee across the entities must be covered under one plan, and contributions face one combined limit.

A freelance web developer who also owns an unrelated food truck could run a separate SEP for each venture. Someone who owns 80% of a consulting firm and 80% of a staffing agency that supplies workers to the consulting firm almost certainly triggers the controlled group or affiliated service group rules, and everything collapses into one plan.

Contribution Limits Across Multiple SEPs

For 2026, the annual contribution limit for a SEP IRA is the lesser of 25% of the employee’s compensation or $72,000.³ That ceiling is per employer. Two truly unrelated businesses can each contribute up to $72,000 to your SEP IRA. Two businesses that form a controlled group share one $72,000 cap between them.

Federal law requires all defined contribution plans maintained by the same employer to be treated as a single plan when this limit is measured.⁴ If one business in a controlled group contributes $50,000 to your account, the other can add no more than $22,000 that year.

The Self-Employed Rate Is Not 25%

If you are self-employed, the 25% headline rate does not apply cleanly. Your maximum contribution is based on net earnings from self-employment after subtracting both the deductible half of your self-employment tax and the SEP contribution itself. Because the contribution and the earnings figure depend on each other, the effective ceiling works out to roughly 20% of your net self-employment income.⁵ IRS Publication 560 contains a Rate Worksheet for Self-Employed and a Deduction Worksheet that walk you through the circular calculation. Skipping this math is one of the most common ways a self-employed person overcontributes, and running two SEPs multiplies the chance of getting it wrong.

Uniform Percentage for Employees

Whatever percentage you choose in a given year, SEP contributions must be a uniform percentage of compensation for every eligible employee in the plan.⁶ You cannot contribute 25% for yourself and 10% for your staff. You can change the rate from year to year, or skip a year entirely, but in any year you contribute, the rate applies to everyone.

SEP IRAs and a Personal Traditional or Roth IRA

Employer contributions to a SEP IRA do not count against the annual limit for personal IRA contributions. For 2026, you can receive up to $72,000 in employer SEP contributions and still put up to $7,500 into a traditional or Roth IRA on your own, or $8,600 if you are 50 or older.⁷

There is a catch. If you make individual contributions directly into your SEP IRA account, as some plan documents allow, those count toward the $7,500 IRA limit rather than the employer contribution limit. Every dollar you personally deposit into the SEP IRA reduces what you can put into a separate traditional or Roth IRA that year.¹ Keeping employer SEP money and personal IRA money in separate accounts avoids the confusion.

Moving Money Between Multiple SEP IRAs

Direct trustee-to-trustee transfers are the clean way to consolidate SEP IRAs. They have no annual limit and do not trigger tax or reporting problems.⁸

Indirect rollovers are the trap. If you take a distribution personally and redeposit it within 60 days, the IRS limits you to one such rollover across all of your IRAs, including SEP, SIMPLE, traditional, and Roth accounts, in any 12-month period.⁸ A second indirect rollover in that window becomes a taxable distribution and can carry a 10% early withdrawal penalty if you are under 59½. With multiple SEP accounts, this wire is easy to trip. Use direct transfers.

Fixing an Overcontribution

Running more than one SEP account or plan makes overcontribution a real risk, particularly when the self-employed calculation is misapplied. The penalty is a 6% excise tax on the excess amount for every year it remains in the account.⁹ The tax compounds annually, so catching the mistake early matters.

The simplest fix is to withdraw the excess plus any earnings it generated before your federal tax return due date, including extensions. Do that in time and no excise tax applies. Miss the deadline and you owe 6% for that year and each subsequent year the excess sits there.¹

For excess contributions past that deadline, the IRS offers a Voluntary Correction Program. The employer typically pays a sanction of at least 10% of the excess amount, excluding earnings, though the sanction does not apply if the excess is under $100.¹⁰ An incorrectly handled correction can trigger plan disqualification, so professional help is worth the cost.

1
Internal Revenue Service. Retirement Plans FAQs Regarding SEPs
2
Office of the Law Revision Counsel. 26 USC 414 – Definitions and Special Rules
3
Internal Revenue Service. IRS Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
4
Office of the Law Revision Counsel. 26 USC 415 – Limitations on Benefits and Contribution Under Qualified Plans
5
Internal Revenue Service. Publication 560 – Retirement Plans for Small Business
6
Internal Revenue Service. Simplified Employee Pension Plan (SEP)
7
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
8
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
9
Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities
10
Internal Revenue Service. SEP Plan Fix-It Guide – Contributions to the SEP-IRA Exceeded the Maximum Legal Limits