The Roth solo 401k contribution limits for 2026 are $24,500 of employee deferrals plus an employer contribution worth up to 20% of net self-employment earnings for a sole proprietor, with a combined cap of $72,000 before catch-ups. Owners aged 50 or older can add $8,000, and owners who turn 60, 61, 62 or 63 during 2026 can add $11,250 instead.
Those Roth solo 401k contribution limits apply to the plan as a whole. The Roth label only changes the tax treatment: Roth dollars go in after tax and can come out tax-free later, while pre-tax dollars cut this year's tax bill. This guide covers how each limit is set and which Roth options apply on each side of the plan.
A solo 401k is the informal name for a one-participant 401(k). The IRS describes it as "a traditional 401(k) plan covering a business owner with no employees, or that person and his or her spouse" and says these plans "have the same rules and requirements as any other 401(k) plan" on its one-participant 401(k) plans page.
The Roth part is a designated Roth account inside that plan. Contributions to it are taxed in the year they are made. Earnings grow without current tax, and a qualified distribution comes out tax-free. Under section 402A(d) of the Internal Revenue Code, a distribution is qualified only after a five-taxable-year period that starts with the first year of designated Roth contributions to the plan, and only once a triggering event such as reaching age 59 and a half, disability or death has occurred.
Because the owner acts as both employee and employer, the plan has two separate contribution buckets. Most of the planning work lies in sizing each one correctly.
The IRS set the 2026 figures in Notice 2025-67. The table compares them with 2025.
| Limit | 2025 | 2026 |
|---|---|---|
| Employee elective deferral (section 402(g)) | $23,500 | $24,500 |
| Catch-up, age 50 or older | $7,500 | $8,000 |
| Catch-up, ages 60 to 63 (replaces the age 50 amount) | $11,250 | $11,250 |
| Total annual additions (section 415(c)), before catch-ups | $70,000 | $72,000 |
| Compensation that can be counted (section 401(a)(17)) | $350,000 | $360,000 |
| Maximum total, under age 50 | $70,000 | $72,000 |
| Maximum total, age 50 to 59 or 64 and older | $77,500 | $80,000 |
| Maximum total, ages 60 to 63 | $81,250 | $83,250 |
A few rules shape how these figures apply in practice.
The $24,500 deferral limit is per person. The IRS notes that an owner who also has a day job with a 401(k) has deferral limits that "are by person, not by plan," so deferrals at the employer plan reduce what is left for the solo plan.
Catch-up contributions sit on top of the $72,000 cap. The IRS page states that total contributions, "not counting catch-up contributions," cannot exceed the overall limit.
Total contributions can never exceed the owner's earned income for the year. A sole proprietor with $40,000 of net earnings cannot put $72,000 into the plan, however the buckets are split.
The first bucket is the elective deferral. The IRS allows "elective deferrals up to 100% of compensation ('earned income' in the case of a self-employed individual) up to the annual deferral limit." For 2026 that limit is $24,500.
Each dollar of the deferral can be designated Roth or pre-tax if the plan document offers a Roth feature. The limit is the same either way, so choosing Roth does not shrink the amount that can go in. The trade-off is timing. A $24,500 Roth deferral for someone in the 24% bracket costs about $5,880 more in federal income tax this year than the same pre-tax deferral, in exchange for tax-free qualified withdrawals later. As a rule of thumb, Roth deferrals tend to suit owners who expect a higher bracket in retirement.
The second bucket is the employer nonelective contribution, often called profit sharing. For an incorporated business, the IRS limit is 25% of compensation as defined by the plan. For an S corporation owner, that compensation is the owner's W-2 salary, which is why reasonable compensation for S corp owners affects how much the business can contribute.
Sole proprietors and single-member LLC owners taxed as sole proprietors follow a different calculation. The IRS defines their compensation as "net earnings from self-employment after deducting both: one-half of your self-employment tax, and contributions for yourself." Because the contribution reduces the very earnings it is based on, a 25% plan rate works out to an effective 20% of net earnings figured before the contribution. The rate table in IRS Publication 560 lists a 25% plan rate as 0.200000 for the self-employed, and states that the deduction for employer contributions "can't be more than 20% of your net earnings (figured without deducting contributions for yourself) from the business that has the plan."
In practice the sole proprietor calculation runs in four steps:
Partners in a partnership use the same approach on their self-employment income from the partnership.
The figures below assume single-member LLCs taxed as sole proprietorships, no other retirement plans and 2026 limits. Dollar amounts are rounded to the nearest dollar.
| Step | Maya, age 45 | Raj, age 61 |
|---|---|---|
| Schedule C net profit | $150,000 | $100,000 |
| Self-employment tax (15.3% of 92.35% of profit) | $21,194 | $14,130 |
| Half of SE tax | $10,597 | $7,065 |
| Net earnings for plan purposes | $139,403 | $92,935 |
| Employer contribution (20% of net earnings) | $27,881 | $18,587 |
| Employee deferral | $24,500 | $24,500 |
| Catch-up | $0 | $11,250 |
| Total solo 401k contribution | $52,381 | $54,337 |
Maya's total of $52,381 sits below the $72,000 cap, so her income is the binding limit. To reach $72,000 with a full $24,500 deferral, she would need a $47,500 employer contribution, which requires $237,500 of net earnings after the SE tax adjustment.
Raj earns less than Maya and still contributes more, because his age puts him in the 60 to 63 bracket and the $11,250 catch-up rides on top of the cap.
Either owner could designate the deferral as Roth. The employer contribution can also be Roth if the plan allows it, as the next section explains. Both examples sit under the 2026 social security wage base of $184,500 confirmed in IRS Publication 15 (2026), so the full 15.3% rate applies to the SE tax base.
Employer contributions to a 401(k) were traditionally pre-tax. Section 604 of the SECURE 2.0 Act changed that by allowing a plan to let participants designate matching and nonelective contributions as Roth. The IRS explained the mechanics in Notice 2024-2, and the points below matter most for a solo 401k owner.
The contribution is taxable. A designated Roth nonelective contribution "is includible in an individual's gross income for the taxable year in which the contribution is allocated to the individual's account." That applies even if the contribution is deemed made for the prior year under the section 404(a)(6) timing rule.
The contribution must be fully vested when allocated. A nonelective contribution may be designated Roth "only if the employee is fully vested in nonelective contributions at the time the contribution is allocated." Solo 401k owners are almost always fully vested in their own contributions, so this rarely blocks them.
Reporting runs through Form 1099-R. The notice says these contributions "must be reported using Form 1099-R for the year in which the contributions are allocated." Owners should expect that form from their plan provider in any year they elect Roth employer money.
The feature is optional for plans. Some prepackaged solo 401k documents do not offer Roth employer contributions, so owners who want them should confirm the plan document before relying on it. A plan that allows after-tax contributions and in-plan conversions is the route for the larger strategy covered in our guide to the mega backdoor Roth for high earners.
For 2026, SECURE 2.0 requires catch-up contributions to be Roth for higher earners. Notice 2025-67 sets the test: the Roth catch-up wage threshold for 2025, which decides who is covered in 2026, "is increased from $145,000 to $150,000." Our explainer on the $150,000 Roth catch-up wage test covers the employer side in detail.
The key word is wages. The final regulation at 26 CFR 1.414(v)-2 measures wages as "wages as defined in section 3121(a)," which means FICA wages from the employer sponsoring the plan. Self-employment income from a sole proprietorship or partnership is taxed under SECA instead, so it is outside that definition.
Example 2 in the regulation shows how this works. A participant who became a partner in May 2026 had $60,000 of FICA wages and a $155,000 distributive share of self-employment income. The example measures 2026 wages against an assumed $155,000 threshold, and because "only $60,000 of that amount were FICA wages," the partner's catch-ups for 2027 were "not required to be designated Roth contributions."
For solo 401k owners, the result depends on entity type:
The regulation formally applies to contributions in taxable years beginning after December 31, 2026, with a reasonable, good faith standard for earlier years. For 2026, the regulation's FICA wage definition is the clearest guide available, so owners with no FICA wages should confirm that their plan provider applies the rule the same way. The broader set of changes is covered in our overview of the SECURE 2.0 Act and retirement saving.
A solo 401k has light paperwork until the balance grows. The IRS states that a one-participant 401(k) plan "is generally required to file an annual report on Form 5500-EZ if it has $250,000 or more in assets at the end of the year." A plan with fewer assets "may be exempt from the annual filing requirement." The threshold looks at total plan assets at year end, including Roth and pre-tax money together.
Owners should track the year-end balance each December and calendar the 5500-EZ once the plan nears $250,000. Clean records of which contributions were Roth, pre-tax, deferral or employer money also make it easier to spot an excess contribution early, before it turns into an additional tax reported on Form 5329.
Qualified distributions from the Roth account are tax-free once the five-year period and a triggering event are both met. Distributions that fail those tests can bring income tax on earnings and, before age 59 and a half, a possible additional tax.
The Roth account also escapes lifetime required minimum distributions. The IRS RMD FAQs state that withdrawals from "Roth IRAs and Designated Roth accounts (401(k) or 403(b)) are not required until after the death of the account owner." The pre-tax side of the same solo 401k is still subject to RMDs, which is one reason some owners in their 60s direct new money to the Roth side.
A solo 401k suits owners with no employees other than a spouse. Once the business hires staff who meet the plan's eligibility rules, the IRS notes that they must be included and the no-testing advantage disappears. At that point a SEP IRA or SIMPLE IRA or a standard 401k may fit better. Owners with high, steady profit who have already maxed the solo 401k sometimes add a defined benefit design, and our guide to cash balance plan contribution limits explains how that pairing works.
Pre-tax contributions also lower the income used for estimated tax, so the deferral and employer elections should be settled before the final quarterly estimated tax payment of the year. Roth contributions do the opposite and leave taxable income unchanged.
What are the Roth solo 401k contribution limits for 2026? The employee deferral limit is $24,500, and the combined employee and employer limit is $72,000. Owners aged 50 or older can add an $8,000 catch-up, and owners aged 60 to 63 can add $11,250 instead, for totals of $80,000 and $83,250.
How is the employer contribution figured for a sole proprietor? Start with net profit, subtract half of self-employment tax, and multiply the result by 20%. That effective 20% rate equals the 25% plan rate after accounting for the contribution itself, as shown in the rate table in IRS Publication 560.
Can employer contributions to a solo 401k be Roth? Yes, if the plan document allows it. SECURE 2.0 section 604 permits Roth nonelective contributions, which are included in income for the year they are allocated and reported on Form 1099-R.
Does the Roth catch-up rule apply to self-employed people? The rule looks at prior-year FICA wages from the employer sponsoring the plan. A sole proprietor or partner with only self-employment income has no FICA wages from the business, so the rule does not reach them. An S corporation owner with more than $150,000 of 2025 W-2 wages must make 2026 catch-ups as Roth.
When does a solo 401k need to file Form 5500-EZ? Generally when plan assets are $250,000 or more at the end of the year. Plans below that level may be exempt from the annual filing.
Madras Accountancy supports US CPA firms and their self-employed clients with retirement contribution calculations, entity-specific compensation figures, Roth and pre-tax tracking, and Form 5500-EZ preparation as part of its tax and bookkeeping services. To discuss support for your clients this season, contact our team.
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