Am I required to make annual contributions to my Solo 401k Plan?
Contributions are not required every year. However, the plan will not be considered qualified if it appears from surrounding facts and circumstances that the plan was established as a temporary program.
A plan will be considered temporary if:
- The plan is abandoned within a few years after being established for reasons other than business necessity
- Substantial and recurring contributions are not made to the plan
A plan will be considered permanent as long as substantial contributions are being made occasionally, even if contributions are not made every year. The employer reserves the right to discontinue the profit sharing contributions without jeopardizing its status as a permanent program.