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Employer Roth contributions

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Employer/profit sharing contributions can now be made as Roth, under the provisions of the SECURE Act 2.0.

Previously, employer/profit sharing contributions could only be made as pre-tax. If you wanted the funds as Roth, you would need to make the pre-tax employer contribution to the Solo 401k and then convert the funds to Roth within the Solo 401k.

The SECURE Act 2.0 now allows you to make an employer Roth contribution directly.

If you would like to make a Roth employer contribution, you are responsible for the following:

  • As employer, your business (which is the adopting business of your Solo 401k) takes the deduction as an employee benefit expense. This deduction is reflected on the company return.
  • Your Solo 401k issues a 1099-R to you as an individual/employee for the amount of the employer contribution
  • The 1099-R is completed as for a Roth conversion of pre-tax funds
Form 1099-R Instructions
  • On your personal return, the amount of the contribution is included in your taxable income

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