Eligibility
Self-employed individuals or small business owners, including those with employees: sole proprietors, partnerships, C corporations, S corporations
Businesses with 100 or fewer employees: sole proprietors, partnerships, C corporations, S corporations
Participating employees must have earned at least $5,000 in compensation during any two years preceding
No age limit
Must have earned income
No age limit
Must have earned income
Contribution Limits
Employer: 25% of compensation or maximum cap for the year (the lesser amount)
2022 max:
$61,000
2023 max:
$66,000
Each eligible employee must receive the same percentage.
Contributions are not mandatory.
Employer contributions: Mandatory 3% matching contribution or 2% non-elective
Participant contributions:
2022: Up to $14,000 in salary deferrals ($17,000 if age 50 or older)
2023: Up to $15,500 in salary deferrals ($19,000 if age 50 or older)
2022: $6,000 ($7,000 if age 50 or older)
2023: $6,500 ($7,500 if age 50 or older)
Contributions are not tax-deductible.
2022: $6,000 ($7,000 if age 50 or older)
2023: $6,500 ($7,500 if age 50 or older)
Highlights
Tax-deferred, so you don’t pay taxes until withdrawn at retirement
Tax-deductible contributions
Easy to set up and maintain
Funded by employer contributions only
Tax deferred, so you don’t pay taxes until withdrawn at retirement
Employer contributions are deductible as business expenses
Funded by employee deferrals and employer contributions
Earnings grow tax-free
Taxes are paid up front, so you’re able to withdraw your contributions tax-free and penalty-free at any time
Tax-deductible contributions based on Modified Adjusted GrossIncome (MAGI)
Contribution Deadline
Employers only:Employer’s tax filing deadline (including extensions)
Employees:No later than 30 days after the month in which deferred
Employer: Employer’s tax filing deadline (including extensions)
Self-employed (with no common-law employees): January 30
April 15, 2023
April 15, 2024
