Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.
Since a SEP IRA is a Traditional IRA that is funded with an employer’s SEP plan contributions, distributions are treated as ordinary income, just like a Traditional IRA. Thus, a SEP IRA is subject to all of the Traditional IRA rules, and early-withdrawal penalties may apply for withdrawals taken prior to age 59 1/2.
