1. Key things to know

2. Open your plan and establish account

To fully establish your plan, you'll also need to send at least one completed self-employed 401(k) account application, along with the adoption agreement, to Fidelity.

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

Click here to open online

If you're setting up a plan and opening an account for someone else or if you'd prefer not to submit documents digitally, please complete steps 1-7 below.

1. Download, print, and read the Defined Contribution Retirement Plan Basic Plan Document No. 04 (PDF)
2. Download, print, and complete the Self-employed 401(k) adoption agreement (PDF)
3. Download, print, and complete the trust agreement (PDF)
4. Be sure to sign and date the adoption agreement and trust agreement and return the original forms to Fidelity Investments
5. Keep copies of all documents and records for your permanent company plan records
6. Complete a self-employed 401(k) account application for yourself and each participating owner (including the business owner's spouse, if applicable).
7. Complete, sign, and return the adoption agreement, along with the original account application(s), the last item in Step 2, to: Fidelity Investments PO Box 770001 Cincinnati, OH 45277-0036

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 Contribution Worksheet (PDF) to calculate your annual contributions.

To mail contributions to Fidelity

1. Make your check payable to Fidelity Investments. Include your account number in the memo section of the check.
2. Include a completed 401(k) Contribution Remittance Form (PDF) with your check, each time you contribute to your plan.
3. Mail the check and completed remittance form to:
   Fidelity Investments
   PO Box 770001
   Cincinnati, OH 45277-0003

To set up salary deferral elections

1. 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.
2. 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.

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.

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.

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.
• 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

• Individuals may contribute up to $20,500 for 2022 ($27,000 if age 50 or older) and $22,500 for 2023 ($30,000 if age 50 or older). Employers may contribute up to 25% of compensation, up to the annual maximum of $61,000 for 2022 and $66,000 for 2023. Total contributions cannot exceed $61,000 for 2022 ($67,500 if age 50 or older and contributing the catch-up contribution amount) and $66,000 for 2023 ($73,500 if age 50 or older and contributing the catch-up contribution amount). Salary deferral catch-up limits are $6,500 for 2022 and $7,500 for 2023 (if age 50 or older).
  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.
• Please submit the Contribution Remittance Form (PDF) when sending a check in with your contribution.
• Sole proprietors and partnerships may choose to use the Self-Employed 401(k) Contribution Worksheet (PDF) to help calculate contributions.

4. Submit withdrawal requests when eligible

• Participants cannot take withdrawals from the plan until 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