SEE - Special Enrollment Exam Quiz: Employer Retirement Plans
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Employer Retirement PlansQuestion 1 of 14

A calendar-year C corporation sponsored a qualified profit-sharing plan that was in existence on December 31, 2025. It timely requested an extension of time to file its 2025 Form 1120, extending the due date to October 15, 2026. It filed that return on April 10, 2026, without claiming a deduction for the 2025 employer contribution because the contribution amount had not yet been decided. On September 10, 2026, the corporation paid $50,000 to the plan and designated the contribution for 2025. The contribution is within the section 404(a)(3) deduction limit.

Which statement is correct regarding the corporation's deduction for the $50,000 contribution?

The corporation must deduct the contribution on its 2026 return because it was paid after the 2025 return was filed.
The corporation may deduct the contribution on its 2025 return by filing an amended return, even though the payment was made after the original return was filed.
The corporation may deduct the contribution on its 2025 return only if it was deposited into the plan trust by December 31, 2025.
The corporation may not deduct a profit-sharing contribution paid after the original due date of the 2025 return.
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SEE - Special Enrollment Exam Quiz

SEE - Special Enrollment Exam Quiz: Employer Retirement Plans

Practice Employer Retirement Plans in SEE - Special Enrollment Exam with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Employer Retirement Plans, giving you a quick way to practice the rules, question types, and explanations that matter most for SEE - Special Enrollment Exam.

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Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

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Question 1

A calendar-year C corporation sponsored a qualified profit-sharing plan that was in existence on December 31, 2025. It timely requested an extension of time to file its 2025 Form 1120, extending the due date to October 15, 2026. It filed that return on April 10, 2026, without claiming a deduction for the 2025 employer contribution because the contribution amount had not yet been decided. On September 10, 2026, the corporation paid $50,000 to the plan and designated the contribution for 2025. The contribution is within the section 404(a)(3) deduction limit.

Which statement is correct regarding the corporation's deduction for the $50,000 contribution?

  1. The corporation must deduct the contribution on its 2026 return because it was paid after the 2025 return was filed.
  2. The corporation may deduct the contribution on its 2025 return by filing an amended return, even though the payment was made after the original return was filed. (correct answer)
  3. The corporation may deduct the contribution on its 2025 return only if it was deposited into the plan trust by December 31, 2025.
  4. The corporation may not deduct a profit-sharing contribution paid after the original due date of the 2025 return.
Explanation: IRC § 404(a)(6). Choice B is correct. A contribution to a qualified plan is treated as made on the last day of the employer's taxable year if it is paid by the due date of the return, including extensions. Here, the payment on September 10, 2026, was before the extended due date of October 15, 2026, and the corporation designated the payment for 2025; because the facts also provide that the contribution is within the section 404(a)(3) limit, the deduction may be claimed on an amended 2025 return. Choice A treats the contribution as a 2026 expense and ignores the extension. Choice C imposes a year-end deposit requirement that section 404(a)(6) does not contain. Choice D ignores the extension rule.

Question 2

A single, calendar-year sole proprietor has no employees. Her 2025 Schedule C net profit is $180,000. She has never maintained a retirement plan. Her SEP IRA plan document sets the contribution rate at the maximum permitted percentage for a SEP.

What is the largest amount she may contribute to her SEP IRA for 2025?

  1. $33,457 (correct answer)
  2. $36,000
  3. $41,821
  4. $45,000
Explanation: Choice A is correct under IRC §§ 401(c)(2), 408(k), and 415(c). For a self-employed person, the maximum SEP contribution is 20% of net profit reduced by the deductible half of self-employment tax. The SE tax base is $180,000 × 92.35% = $166,230; SE tax is 15.3% × $166,230 = $25,433.19; half is $12,716.60. The SEP base is $180,000 − $12,716.60 = $167,283.40, and 20% of that is $33,456.68, which is below the 2025 §415(c) cap. Choice B is 20% of gross net profit and ignores the half-SE-tax reduction. Choice C applies 25% rather than 20% to the SEP base. Choice D applies 25% to gross net profit.

Question 3

A participant, age 45, borrows $40,000 from his employer's 401(k) plan in 2025; the plan permits the loan and the loan satisfies the requirements of § 72(p). He separates from service before repaying the loan, and the plan treats the unpaid balance as a deemed distribution in 2026.

Which statement is correct regarding the unpaid loan balance?

  1. The balance is taxable only when the participant later receives an actual distribution from the plan, with no amount taxed at the time of the deemed distribution.
  2. The balance is taxable in 2026, is not an eligible rollover distribution, and is subject to the 10% additional tax unless an exception applies. (correct answer)
  3. The balance is an eligible rollover distribution for 2026 and is subject to the 20% mandatory withholding requirement unless a direct rollover is elected.
  4. The balance is taxable in 2026, but it is exempt from the 10% additional tax because it was a plan loan rather than a plan distribution.
Explanation: Under IRC § 72(p), an unpaid plan loan that becomes a deemed distribution is included in gross income in the year of the deemed distribution. A deemed distribution is not an eligible rollover distribution, so the 20% mandatory withholding rules do not apply; the 10% additional tax under § 72(t) applies unless an exception applies. Thus Choice B is correct. Choice A misstates the timing and ignores that the deemed distribution is taxable in 2026. Choice C incorrectly treats a deemed distribution as an eligible rollover distribution. Choice D incorrectly exempts the deemed distribution from the early-distribution tax.

Question 4

An employer maintains a SIMPLE IRA plan and has used a matching contribution formula of 100% of the employee's salary deferral up to 3% of compensation. In the notice it gave before the 2025 election period, the employer stated that the match for 2025 would be 1% instead of 3%. The employer had not used a below-3% match in any of the preceding four years.

Which statement correctly describes the 2025 match?

  1. The reduction is not permitted because a SIMPLE IRA matching contribution may not be reduced below 3% for any year, regardless of notice.
  2. The reduction is not permitted unless the employer also makes the 2% nonelective contribution on behalf of all eligible employees.
  3. The reduction is permitted because a SIMPLE IRA match may be reduced to 1% for no more than two years in any five-year period if the required notice is given. (correct answer)
  4. The reduction is permitted only if the employer first obtains an IRS waiver from the two-out-of-five-year rule for the 2025 plan year.
Explanation: Choice C is correct. IRC § 408(p)(2) permits an employer under a SIMPLE IRA to reduce the 3% matching contribution to as low as 1% if the required notice is given and the reduced rate is not in effect for more than two years in the five-year period ending with the year. Because the employer gave the required notice and had not used a below-3% match in the preceding four years, the 1% match is permitted for 2025. Choice A treats the 3% matching rule as absolute and ignores the reduction exception. Choice B incorrectly requires the employer also to make the separate 2% nonelective contribution. Choice D incorrectly requires an IRS waiver, which the statute does not provide.

Question 5

An individual is the sole shareholder and employee of an S corporation and performs substantial services for it during 2025. For 2025 she receives only a $150,000 distribution from the corporation and no W-2 wages. The corporation's SEP IRA plan uses a 25% contribution rate.

What is the maximum SEP IRA contribution the corporation may make for her for 2025?

  1. $70,000, because the §415(c) annual addition limit is the maximum for 2025.
  2. $30,000, because 20% of the distribution is the self-employed contribution rate.
  3. $37,500, because the plan's 25% contribution rate applies to the distribution.
  4. $0, because the S corporation distribution is not compensation for retirement plan purposes. (correct answer)
Explanation: IRC §§ 408(k), 414(s) and 415(c)(3). Choice D is correct. For an S corporation shareholder-employee, compensation for retirement plan purposes is W-2 wages; S corporation distributions are not compensation. Because the shareholder received no W-2 wages in 2025, no SEP contribution can be made for her. Choice B incorrectly applies the sole-proprietor formula to an S corporation distribution. Choice C treats the distribution as wages. Choice A applies the annual addition dollar cap while ignoring that compensation is zero.

Question 6

Which of the following is correct regarding the maximum elective deferral that a 62-year-old employee may make to a SIMPLE IRA plan maintained by the employer for 2025?

  1. The maximum elective deferral is $21,750, which includes the $5,250 increased catch-up for employees ages 60 through 63. (correct answer)
  2. The maximum elective deferral is $20,000, which includes the regular $3,500 catch-up for employees who are age 50 or older.
  3. The maximum elective deferral is $25,250, which includes the regular $3,500 catch-up and the $5,250 increased catch-up.
  4. The maximum elective deferral is $34,750, the limit that applies to an employee of the same age in a 401(k) plan.
Explanation: IRC § 408(p) sets the SIMPLE IRA elective deferral limit for 2025 at $16,500, and IRC § 414(v) provides the catch-up contribution limits. An employee who attains age 60 through 63 during the year may make an increased catch-up contribution of $5,250 (150% of the regular $3,500 catch-up) in place of the regular catch-up, so the ceiling for 2025 is $16,500 + $5,250 = $21,750. Choice A is correct. Choice B misstates the catch-up amount: the regular age-50 catch-up is $3,500, but an employee age 62 uses the increased catch-up of 5,250.ChoiceCaddstheregularandincreasedcatch−upstogether,buttheincreasedcatch−upisinlieuof,notinadditionto,theregularcatch−up.ChoiceDuses401(k)planlimits(5,250. Choice C adds the regular and increased catch-ups together, but the increased catch-up is in lieu of, not in addition to, the regular catch-up. Choice D uses 401(k) plan limits (23,500 basic limit plus $11,250 increased catch-up); SIMPLE IRA plans have separate, lower statutory limits.

Question 7

Alberto, age 57, is a participant in his employer's §401(k) profit-sharing plan, which permits catch-up contributions. In 2025, Alberto makes a $23,500 regular elective deferral and a $7,500 catch-up contribution. His employer contributes a $9,000 matching contribution and a $16,000 profit-sharing contribution on his behalf. Alberto also contributes $5,000 as an after-tax employee contribution. His 2025 compensation is $200,000. What is the amount of Alberto's §415(c) annual additions for 2025?

  1. $30,000
  2. $48,500
  3. $53,500 (correct answer)
  4. $61,000
Explanation: IRC § 415(c)(2); IRC § 414(v)(3)(A). Annual additions are employer contributions, employee contributions and forfeitures allocated to the participant's account; pre-tax elective deferrals count as employer contributions and after-tax contributions count as employee contributions. Catch-up contributions are not subject to the § 415(c) limit and are left out of annual additions. Alberto's annual additions are $23,500 + $9,000 + $16,000 + $5,000 = $53,500; the 7,500catch−upisdisregarded.ChoiceCiscorrect.ChoiceA(7,500 catch-up is disregarded. Choice C is correct. Choice A (30,000) is wrong because it omits the 23,500regularelectivedeferral,whichisanannualaddition.ChoiceB(23,500 regular elective deferral, which is an annual addition. Choice B (48,500) is wrong because it omits the 5,000after−taxemployeecontribution,whichisalsoanannualaddition.ChoiceD(5,000 after-tax employee contribution, which is also an annual addition. Choice D (61,000) is wrong because it adds the $7,500 catch-up contribution, which § 414(v)(3)(A) excludes from the § 415(c) limit.

Question 8

Mateo, age 63, participates in a §401(k) plan at one employer and a §403(b) plan at an unrelated employer during 2025. Neither plan is a SIMPLE plan, and each plan permits catch-up contributions up to the maximum statutory amount for his age. Mateo is not eligible for the 403(b) plan's 15-year service catch-up. In 2025, Mateo defers $20,000 under the 401(k) plan and $15,000 under the 403(b) plan. What amount of Mateo's 2025 deferrals is an excess deferral under §402(g)?

  1. $0
  2. $250 (correct answer)
  3. $4,000
  4. $11,500
Explanation: Choice B is correct. Under IRC §402(g)(1), elective deferrals under all §401(k) and §403(b) plans are aggregated. For 2025, the base elective-deferral limit is $23,500. Because Mateo is 63, the applicable catch-up is the increased $11,250 amount for participants ages 60-63 under IRC §414(v), not the regular $7,500 amount. His total deferrals are $35,000; the base limit plus the increased catch-up is $34,750, leaving a 250excessdeferral.ChoiceA(250 excess deferral. Choice A (0) would result from applying a separate §402(g) limit to each employer plan. Choice C ($4,000) uses the regular age-50+ catch-up of 7,500insteadoftheincreasedcatch−up.ChoiceD(7,500 instead of the increased catch-up. Choice D (11,500) ignores the catch-up entirely and compares the total deferrals only with the $23,500 base limit.

Question 9

Luz, age 55, participates in her employer's SIMPLE IRA plan, which is not an 'applicable plan' eligible for the increased SIMPLE contribution limits. Her 2025 compensation is $40,000. The plan permits catch-up contributions and provides a matching contribution equal to 3% of compensation. Luz participates in no other employer plan and makes the maximum salary-reduction and catch-up contributions. How much will be contributed to Luz's SIMPLE IRA for 2025?

  1. $17,700
  2. $21,200 (correct answer)
  3. $22,650
  4. $28,200
Explanation: Choice B is correct. IRC §408(p) sets the 2025 SIMPLE IRA salary-reduction limit at $16,500, with a $3,500 catch-up for participants age 50 or older under IRC §414(v); employer matching contributions are not part of that limit. Luz's salary reduction and catch-up total $20,000, and the employer match is 3% × $40,000 = $1,200, for a total of 21,200.ChoiceA(21,200. Choice A (17,700) includes the match but omits the 3,500catch−up.ChoiceC(3,500 catch-up. Choice C (22,650) is the result of applying the increased SIMPLE limits for certain applicable plans ($17,600 and 3,850),butthefactsstatetheplanisnoteligibleforthoselimits.ChoiceD(3,850), but the facts state the plan is not eligible for those limits. Choice D (28,200) substitutes the general §401(k) elective-deferral limit of $23,500 for the SIMPLE IRA limit before adding the catch-up and match.

Question 10

An employer makes contributions to a SEP IRA for its common-law employees. Which of the following is correct for 2025?

  1. The maximum contribution for an employee with $300,000 of compensation is $75,000.
  2. The maximum contribution for an employee with $200,000 of compensation is $50,000. (correct answer)
  3. The maximum contribution for an employee with $400,000 of compensation is $100,000.
  4. The maximum contribution for an employee with $450,000 of compensation is $87,500.
Explanation: IRC § 404(h) limits an employer's SEP contribution for an employee to 25% of the employee's compensation; IRC § 401(a)(17) caps compensation taken into account at $350,000 for 2025; and IRC § 415(c)(1) caps annual additions at $70,000 for 2025. For an employee with $200,000 of compensation, 25% is $50,000, which is below both caps, so Choice B is correct. Choice A computes 25% of $300,000 as $75,000 but ignores the $70,000 annual-additions cap, which reduces the limit to $70,000. Choice C applies 25% to the actual $400,000 of compensation and ignores both the $350,000 compensation cap and the $70,000 annual-additions cap; the correct limit is $70,000. Choice D applies the $350,000 compensation cap to reach $87,500 but ignores the $70,000 annual-additions cap; the correct limit is $70,000.

Question 11

Which of the following is correct regarding federal income tax withholding on a distribution from a qualified retirement plan for 2025?

  1. A required minimum distribution from the plan paid directly to the participant is subject to mandatory 20% federal income tax withholding.
  2. A distribution that is directly rolled over from the plan to a traditional IRA is not subject to federal income tax withholding. (correct answer)
  3. A hardship distribution of elective deferrals paid directly to the participant is subject to mandatory 20% federal income tax withholding.
  4. An eligible rollover distribution that is paid directly to the participant is subject to mandatory 10% federal income tax withholding.
Explanation: IRC § 3405(c)(1) imposes mandatory 20% withholding on an eligible rollover distribution from a qualified plan unless the distribution is paid in a direct rollover to an eligible retirement plan, in which case no withholding applies. Choice B is therefore correct. Under IRC § 402(c)(4), the term 'eligible rollover distribution' excludes required minimum distributions and hardship distributions of elective deferrals, so the mandatory 20% withholding does not apply to them. Choice A misstates the rule for required minimum distributions: because they are not eligible rollover distributions, they are not subject to the 20% mandatory withholding. Choice C misstates the rule for hardship distributions: they are not eligible rollover distributions either, and other nonperiodic distributions that are not eligible rollover distributions are generally subject to default 10% withholding unless the payee elects no withholding. Choice D misstates the rate: an eligible rollover distribution paid to the participant is subject to mandatory 20% withholding, not 10%.

Question 12

A 401(k) plan has an actual deferral percentage (ADP) of 4% for its nonhighly compensated employees (NHCEs) and 5.5% for its highly compensated employees (HCEs) for the 2025 plan year. Which of the following is correct regarding the ADP test?

  1. The plan fails the ADP test because the HCE group's ADP of 5.5% exceeds 125% of the NHCE ADP, which is 5%.
  2. The plan satisfies the ADP test because the HCE group's ADP of 5.5% is below 200% of the NHCE ADP, which is 8%.
  3. The plan satisfies the ADP test because the HCE group's ADP of 5.5% does not exceed the permitted maximum of 6%. (correct answer)
  4. The plan fails the ADP test because the HCE group's ADP of 5.5% exceeds the NHCE group's ADP of 4%.
Explanation: IRC § 401(k)(3)(A)(ii) requires that the ADP for highly compensated employees not exceed the greater of (I) 125% of the NHCE ADP or (II) the lesser of 200% of the NHCE ADP or the NHCE ADP plus 2 percentage points. With an NHCE ADP of 4%, prong (I) is 5%; prong (II) is the lesser of 8% and 6%, or 6%; and the permitted maximum is the greater of 5% and 6%, or 6%. Because the HCE ADP of 5.5% is within 6%, the plan satisfies the test, making Choice C correct. Choice A applies only the 125% prong and ignores the alternative prong that permits up to 6%. Choice B applies only the 200% measure and ignores the 'plus 2 percentage points' limitation and the greater-of comparison. Choice D treats the HCE ADP as limited to the NHCE ADP, which is not the statutory test.

Question 13

Which of the following is correct regarding whether an employee is a highly compensated employee (HCE) for the 2025 plan year? Assume the employer does not make the top-paid group election.

  1. An employee hired in 2025 who received $200,000 of compensation from the employer in 2025 is an HCE for 2025, regardless of any ownership interest.
  2. An employee who owns 10% of the employer is an HCE for 2025 only if the employee's 2024 compensation exceeded $155,000.
  3. An employee who received $158,000 of compensation from the employer in 2024 is not an HCE for 2025 on the basis of compensation, because the applicable dollar limit is $160,000.
  4. An employee who received $175,000 of compensation from the employer in 2024 is an HCE for 2025, regardless of any ownership interest. (correct answer)
Explanation: IRC § 414(q)(1) provides that an employee is a highly compensated employee for a plan year if the employee was a more-than-5% owner of the employer at any time during the year or the preceding year, or received compensation from the employer in the preceding (look-back) year in excess of the applicable dollar limit for that look-back year. For HCE status in 2025, the test is 2024 compensation over $155,000; the $160,000 limit applies to 2025 compensation and determines HCE status for 2026. Choice D is correct: $175,000 of 2024 compensation exceeds $155,000, so the compensation test alone makes the employee an HCE for 2025. Choice A misstates the look-back period: 2025 compensation is relevant to HCE status for 2026, and an employee hired in 2025 with no 2024 compensation and no ownership interest is not an HCE for 2025. Choice B misstates the ownership rule: a more-than-5% owner is an HCE without regard to the compensation test. Choice C applies the wrong year's dollar limit: the $160,000 figure governs 2026 status, and $158,000 of 2024 compensation exceeds the $155,000 limit that governs 2025 status.

Question 14

A participant is age 63 and the only participant in his employer's 401(k) profit-sharing plan. His 2025 W-2 compensation is $300,000. The plan permits the maximum elective deferral and catch-up contributions. For 2025, he will make the maximum elective deferral, and the employer will make the largest profit-sharing contribution that can be allocated to his account without exceeding the statutory annual addition limit.

What is the maximum total amount that may be allocated to the participant's account for 2025, including the catch-up contribution?

  1. $70,000
  2. $77,500
  3. $81,250 (correct answer)
  4. $109,750
Explanation: Choice C is correct under IRC §§ 402(g), 414(v), and 415(c). For 2025, the regular §402(g) deferral limit is $23,500, and the catch-up limit for a participant age 60–63 is $11,250. Catch-up contributions are not counted in the §415(c) annual addition limit. The employer contribution can therefore be 46,500(46,500 (70,000 − $23,500), and total allocations are $23,500 + $46,500 + $11,250 = $81,250. Choice A counts the catch-up toward the §415(c) cap. Choice B uses the regular age-50+ catch-up of $7,500 rather than the $11,250 age-60-to-63 catch-up. Choice D uses the 25%-of-compensation deduction limit for employer contributions without applying the §415(c) annual addition cap.