Contribution from c-corp to solo 401K

Submitted by Rob Jackson on Sun, 2022-12-18 14:16

I have a c-corp & a solo 401k roth trust.
My spouse & I are only shareholders & employees of the c-corp.
We don’t take much in salary from the c-corp.
We both are in our 60’s.
Can we have the c-corp make a distribution to the solo 401k roth?
I assume there is a limit, say whatever we pay in salary.
Any other IRS related issues to be aware of?
Our CPA admits he is not knowledgeable when it comes to IRAs & Solo 401Ks.

I find your newsletters to be very informative.
Thank you.



Submitted by Rob Jackson on Mon, 2023-01-02 17:42

Can someone help answer my question?

Submitted by William Tuttle on Tue, 2023-01-03 04:08

  • This is all standard 401k plan information. If you are not well versed in this information. You should engage a professional third party administrator (TPA). A minority of CPAs are well versed in small business 401k plans.
  • The 401k plan adoption agreement and any individual employee deferral elections must have been completed by 12/31/22 to make employee deferrals for the 2022 tax year.
  • Employee deferrals must be deducted from compensation not already received with a “pay date” by 12/31.
  • While technically, an employee can defer up to 100% of their compensation. They are limited to their net compensation after mandatory deductions not to exceed the employee deferral limit. At a minimum this includes FICA deductions. 
  • Since a one-participant 401k is not an ERISA plan. The C-Corp realistically has until the Form W-2 filing deadline to deposit the deferrals.
  • Employer contributions up to 25% of compensation may be made until the C-Corp’s tax filing deadline including extensions provided the 401k plan was adopted by that date.
  • Currently, employer contributions can not be Roth.
  • The (employee deferrals employer contributions) annual additions cannot exceed the lessor of 100% of compensation and the statutory limit.
  • If eligible catch-up contributions are not included in the annual addition limit. They may be made as Roth contributions.

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