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Deductions & credits
Thank you, Patricia, as a sole proprietor business, there are no w-2 employees. According to the thread here https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-no-place-to-e[product key rem... A sole proprietor with no W-2 employees, where the individual is the only person in the business, can have a Solo 401(k) plan with the auto-enrollment credit and claim that $500 credit each year for 3 years without qualifying for the startup credit.
Post by lac528:
The eligibility requirements for the auto-enrollment credit (Part II of Form 8881) are different than the eligibility requirements for the startup credit (Part I of Form 8881). This has been expressed before on this forum in these posts months ago:
A sole proprietor with no W-2 employees, where the individual is the only person in the business, can have a Solo 401(k) plan with the auto-enrollment credit and claim that $500 credit each year for 3 years without qualifying for the startup credit.
This is further explained in this link which someone included in one of the above posts:
This page explicitly explains how a Solo 401(k) with no W-2 employees can qualify for the auto-enrollment credit but cannot qualify for the startup credit:
So I am not sure how to handle this. Thanks for your checking.