1. Key things to know

2. Open your plan and establish account

To fully establish your plan, you'll also need to complete the self-employed 401(k) account application, adoption agreement and trust agreement. Please keep copies for your records, along with the Defined Contributions Retirement Basic Plan Document No. 04.

Online plan establishment is available if you:

• Are establishing a new plan
• Are the plan administrator and plan participant
• Are a US Citizen
• Are naming your spouse as your primary beneficiary if you are married

If you are not eligible for online establishment, you may:

Review, download, complete and keep for your records the following form:

Designated Roth Contributions Addendum to the Defined Contribution Retirement Plan

Learn more

Review, download and save (or print for your records) the following document:

• Defined Contribution Retirement Basic Plan Document No. 04 (PDF)

Review, download, complete, return to Fidelity, and keep a copy for your records the following forms:

• Self-employed 401(k) adopting agreement (PDF)
• Trust agreement (PDF)
• Self-employed 401(k) account application for yourself and each participating owner (including the business owner's spouse, if applicable).

Once you've established your self-employed 401(k) plan and any new account(s), the next step is to contribute to your 401(k).

3. Contribute to your account

You can use the Small Business Retirement Plan Contribution Calculator to calculate your annual contributions.

You may contribute to your Self-employed 401(k) through the following methods:

• Contribute now via EFT on Fidelity.comLog In Required or from a Fidelity non-retirement account in the name of the plan administrator and used for the business.
• Deposit checks on Fidelity's mobile app using mobile check deposit
• Send a contribution via an external Billpay service

To set up salary deferral elections

• Online from an existing brokerage account in the name of the plan administrator used exclusively for the business.
• You can use the sample 401(k) Salary Reduction Agreement Form (PDF). Fill it out yourself and have each participating owner (including the business owner's spouse, if applicable) fill it out as well.
• Keep this form for your records and do not forward to Fidelity.

To roll over other plan assets

If you already have a retirement savings plan for your business, you may be able to roll over or transfer existing plan assets to a Self-Employed 401(k). Consult with your tax advisor or benefits consultant prior to making a change to your retirement plan.

Assets from the following plans may be eligible to be rolled over into a Self-Employed 401(k):

• Profit Sharing, Money Purchase, and 401(k) plans
• SEP IRAs and SARSEPs
• SIMPLE IRA accounts after two years of SIMPLE participation
• 403(b) and governmental 457(b) plans
• Traditional IRAs

Call a retirement specialist at 800-544-5373, and say "retirement representative," to get help with a rollover into a Fidelity Self-Employed 401(k).

Contribution deadlines

The deadline for self-employed individuals and owner-only businesses to make both the company profit sharing and employee salary deferral is the business's tax filing deadline, including extensions.

Contribution deadlines may be different in the year the plan is established, see establishment deadlines

For the year salary deferrals are to commence, generally participants (including self-employed individuals and spouses of owners if they are also participating employees) must make a written salary deferral election by the business's year end.

4. Roth Self-employed 401(k) Information

Section 603 of the SECURE 2.0 ACT of 2022 requires that eligible participants in a 401(k) plan whose wages for the preceding calendar year exceeded $145,000, must make any catch-up contributions as designated Roth deferrals.

Coming soon

Fidelity is pleased to inform you that Roth contributions will be available for the Self-employed 401(k) plan prior to the regulatory deadline of Jan 1st, 2026.

Depending on your unique situation, you may be eligible to make Roth deferrals for tax years 2024 and beyond. For questions around your specific eligibility to make Roth contributions, we strongly suggest you work with a tax professional. 

Action required

Steps you must take to enable your plan to accept designated Roth deferral contributions:

1. You must fill out and retain in your files the Designated Roth Contributions Addendum to the Defined Contribution Retirement Plan Profit Sharing/Safe Harbor 401(k) Plan Adoption Agreement No. 001 Do not return this to Fidelity.
   • Fill out and retain this addendum in your files before the end of the calendar year for which you intend to contribute.
   • Do not complete sections 2 and 3 of the addendum: conversions are not offered for the Self-employed 401(k).
2. Open a Roth Self-Employed 401(k) account.
   • The Roth Self-employed account is not currently available; we will notify clients when it becomes available.
   • Your designated Roth deferral contributions must be made into the Roth Self-employed 401(k) account.
   • The Roth Self-employed 401(k) account is not a separate plan, it is part of your existing plan and is a separate account for accurate accounting and tax reporting purposes.
3. Make your eligible contributions by your tax deadline.
   • Please consult a tax professional if you have questions related to the contributions you are eligible to make and their deadlines.

Important information about the Roth Self-Employed 401(K)

1. Contributions
   • Your Self-employed 401(k) allows for two different contribution types: employer profit sharing and employee salary deferrals, that hasn’t changed. However, should you elect to complete the addendum and add the ability to contribute designated Roth deferrals to your plan, keep in mind the employee salary deferral contribution has one overall annual limit, and that is aggregated between your traditional self-employed 401k and your Roth self-employed 401K. You may contribute the entire amount as a traditional tax-deductible contribution, or a Roth non-deductible contribution, or split the amount between both. For 2024 the total amount you can contribute as an employee deferral is $23,000 if you are under the age of 50 and $30, 500 if you are age 50 or older.
   • Any contributions you have made as traditional tax-deductible contributions must remain as traditional tax-deductible contributions and cannot be recharacterized to a Roth contribution.
2. Distribution and taxes
   • Designated Roth deferral contributions are not tax deductible.
   • Distributions from your Roth Self-employed 401(k) account are tax free, provided they are qualified distributions.
     • To be qualified, the distribution must occur when the Roth Self-employed 401(k) has met its 5-year aging AND the participant is 59 ½ years old or older, disabled or deceased.
     • The 5-year aging begins Jan 1 of the year the first contribution is made for.
   • Distributions from your Roth Self-employed 401(k) account that are nonqualified may be subject to taxes and penalties.
   • You must meet a triggering event to take a distribution. Triggering events are listed on the Distribution form.

Maintaining your self-employed 401(k)

A self-employed 401(k) is a qualified retirement plan for a small business where the only employees are the owner(s) of the business and/ or the spouse(s) of the owner(s) if they work for the business. You shouldn't use this plan if you have any other employees. The self-employed 401(k), in some cases, can offer you the ability to make a larger contribution than other plans. However, it does have extensive administrative and tax reporting requirements that are your responsibility as the business owner and plan administrator. The list below does not cover all of your responsibilities. You may want to consult the IRS or a qualified tax advisor if you have additional questions.

Employer and plan administrator responsibilities

1. Establish your plan

• The deadline to open a new plan is generally the tax filing deadline (including extensions) of the sponsoring business.
  Note: For partnerships and corporations that establish their plan after the business's year end, only the employer profit sharing contributions are allowed for the first year. Sole proprietors who establish their plan after the business's year end and before their tax filing deadline (no extension) must make their deferral contribution by their tax filing deadline (no extension). Sole proprietors who establish their plan after their tax filing deadline but before their extension deadline may only make profit sharing contributions for the plan's establishment year.
• The employer will establish the plan and name the plan administrator. Typically with the self-employed 401(k), the employer and the plan administrator are the same person, but you may name someone else as plan administrator if you choose.

NOTE: The plan administrator is responsible for making contributions, authorizing withdrawals, preparing and filing the 5500 when necessary, and recording and keeping documents for the plan and updating those documents when necessary.

2. Notify eligible participants of their ability to defer pay into the plan

Eligible participants who wish to defer salary must complete a salary reduction agreement form before the plan's year end. You may use the Salary Reduction Agreement form (PDF) and keep it in your own records.

3. Contribute to the participants' accounts by your business' tax filing deadline plus extensions

• Note: For corporations and partnerships, in the year the plan is established, if it is established after the business's year end, only profit sharing contributions are allowed. In subsequent years, both company profit sharing and employee salary deferrals are permitted. Sole proprietors must open their plan by their tax filing deadline (no extension) to make both profit sharing and salary deferral contributions in the first year. Sole proprietors must open their plan by their tax filing deadline (no extension) to make both profit sharing and salary deferral contributions. In the first year deferral contributions must be made by the tax filing deadline (no extension). Sole proprietors who establish their plan after the tax filing deadline but prior to the extension deadline may only make employer profit sharing contributions the first year of their plan.
• As a plan sponsor, you can make contributions online via EFT from your bank or from an individual account on Fidelity.com. Mobile check deposit is available using the Fidelity's mobile app.
• For assistance calculating your contribution amount please use the Small Business Retirement Plan Contribution Calculator.
• The employee salary deferral contribution has one overall annual limit, and that is aggregated between your Traditional self-employed 401k and your Roth self-employed 401K deferral.

4. Submit withdrawal requests when eligible

• Participants are eligible for a withdrawal once a triggering event occurs, such as turning age 59½, disability, or death. 10% early withdrawal penalty applies if you take a distribution before you're 59½ years old. Required minimum distributions (RMDs) start at age 73.
• There is a 20% mandatory federal withholding requirement for any withdrawal that is otherwise eligible to roll over to another plan.
• Withdrawals are done in writing using the Defined Contribution Retirement Plan One-Time Withdrawal form (PDF).
• RMDs are generally required the year you turn 73 years of age for self-employed retirement plans, regardless of your working or participation status. You may set up recurring RMDs using the Defined Contribution Retirement Plan - Automatic Withdrawals form.

5. Abide by the Defined Contributions Retirement Plan document (PDF)

• This document contains the IRS-approved rules for your plan, as well as a definition of terms.
• Important Information regarding your Defined Contribution Retirement Plan:
  Participation in a 401(k) arrangement has changed with the passing of the SECURE Act and the SECURE Act 2.0. Beginning in 2021 the strictest age and service requirements that can be applied to an employee before the employee can participate in a 401(k) arrangement are: 1) at least 21 years old and the date completing 1 year (12 months) and no less than 1, 000 hours of service or 2) completing 3 consecutive years (36 months) of service with at least 500 hours of service or more each year provided the employee has attained age 21 by the close of the third year. The later could make 401(k) deferrals under the plan available to certain part-time employees starting 1/1/2024. Beginning in 2023, the SECURE Act 2.0 reduces the 3 year rule to 2 years. This could affect employees starting 1/1/2025.

6. Keep good records

Starting with the forms you fill out to establish your plan, you'll want to keep a file of all relevant documents. This is not a comprehensive list, but among the important documents you will need are the plan document, the adoption agreement, records of all contributions and distributions, and any corrections of errors of operation, should they occur. Over the life of your self-employed 401(k), you may have reason to amend your adoption agreement. You should keep any older versions, along with the most current version. You may operate under different versions of the plan document, and you should keep a copy of all versions. Note: Fidelity doesn't retain any of these records on your behalf.

7. Update your records

• Any change in your plan that would alter information on your adoption agreement requires you to fill out a new adoption agreement, amending your plan. Substantial changes could result in a termination of the plan. If you are unsure whether you should amend or terminate your plan, please see your tax advisor.
• The plan document itself is updated for legislative changes every 6 years. Once Fidelity makes the changes to the plan document and they are approved by the IRS, you'll need to restate your plan. That will require an amended adoption agreement and a new plan document.

8. File the version of the 5500 that's appropriate for your plan

• Most owner-only plans can file the 5500EZ after plan assets exceed $250,000 but consult the IRS or your tax advisor if you are unsure of which version of the form applies to you.
• See Understanding form 5500 for more information and help with the filing.

9. Correct errors of operation

• If an error is made operating your plan, it's your responsibility as the employer to make necessary corrections. See "helpful resources" below for more information
  A common error of operation is over-contributing to the plan, resulting in an excess contribution. You should do everything you can to avoid over contributing, as it can be costly and difficult to correct an excess contribution. There are multiple types of excess, but the two most common are:
  1. The profit-sharing excess which cannot be removed from the plan. The IRS remedy is to "carry forward" the excess and apply it to a future year. Penalties may apply.
  2. An excess salary deferral, which must be removed by 4/15 after the year the excess was deferred.
• If you believe you have contributed more than you should, please consult your tax advisor. If you have questions, our retirement representatives may be able to help. Please call 1-800-544-5373 and say "Small Business Retirement plan." Please be aware, our representatives are not tax advisors.

10. Terminate your plan

• An active plan should have substantial and recurring contributions. If you are ready to terminate your plan please see the. Self-employed 401(k) Termination Guide (PDF)
• If instead if a self-employed 401(k) you have a money purchase and/or a profit sharing plan please use one of the following guides:
  • Money Purchase Termination Guide (PDF)
  • Profit Sharing Termination Guide (PDF)

11. Provide Fee Disclosure information

Your self-employed 401(k) should not be subject to Title 1 of ERISA because it does not cover employees beyond the owners of the business sponsoring the plan (or their spouses). However, you if operate a money purchase or profit sharing plan with common law employees you should be aware of the to keep up to date on fee disclosure regulations for plan sponsors and plan participants.

Fidelity's Responsibility

1. Provide the plan document

Defined Contributions Retirement Plan Document (PDF) is qualified and approved by the IRS and updated as required.

2. Maintain accounts

Fidelity will provide the self-employed brokerage account(s) on our platform and the custodial agreement that outlines the rules and agreement for the account(s). Please see Establish Your Accounts.

3. Provide an Annual Valuation Statement (AVS) for the plan annually

• The AVS is available online and/or mailed annually in late April.
• A detailed explanation is on the Understanding form 5500 page.

4. Prepare tax forms for participants

IRS form 1099-R for each year distributions or rollovers are processed out of an account.

5. Offer planning and investment guidance

• Choose your investments using our exceptional online tools and data. Our experienced representatives can also help you make an informed decision.
• For more information on how we can help you with investment management, planning, and advice, please see What We Offer.

Helpful resources

1. IRS 401(k) plan Fix-It Guide
2. The Employee Plans Compliance Resolution System (EPCRS)
3. IRS 401(k) plan additional resources
4. IRS Website
5. Understanding form 5500