Is a Solo 401K considered having a "retirement plan at work" if I didn't contribute to it during the tax year?

[bethfly]

I'm a sole proprietor. In 2021, I set up a Solo 401K and contributed to it. Because of the Solo 401K that year, the traditional IRA contribution I had already made was limited due to having a retirement plan at work. Makes sense.

In 2022, I didn't contribute to either the 401K or the IRA.

For tax year 2023, I only contributed to the traditional IRA, not the Solo 401K.  (In hindsight, I should have contributed to the 401K, not the IRA, but I was panicking because it was the Friday before tax day and I wanted to make sure I could make my contribution in time, so it didn't occur to me that there might be consequences for choosing to contribute to one account or the other.)

My question now is whether my IRA should have been limited for 2023 due to having a "retirement plan at work" if I didn't contribute anything to the 401K all year.

In discussing when employers should check the W-2 box 13 for retirement plan, IRS.gov says:

You should check the retirement plan box if an employee was an "active participant" for any part of the year in: a qualified pension, profit-sharing, or stock-bonus plan under Internal Revenue Code Section 401(a) (including a 401(k) plan).

Generally, an employee is an active participant if covered by a: defined contribution plan (for example, a 401(k) plan) for any tax year and is credited with any contributions or forfeitures

https://www.irs.gov/retirement-plans/common-errors-on-form-w-2-codes-for-retirement-plans

Does "any tax year" mean that if I contributed in any previous tax year, then I'm still an active participant in years that I don't contribute? And is my traditional IRA contribution limited for 2023? If so, I have to amend my return and pay more tax. Ugh.

[dmertz]

With respect to a solo 401(k), which I will assume was established as a calendar-year plan, being an active participant for a particular year means that additions were made for that plan year.  If no additions were made to the solo 401(k) for 2023, you were not an active participant in this plan for 2023.

[bethfly]

Thank you. 

I had also asked the question on Reddit and received the link on IRS.gov that supports what you said: 

https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan

You’re covered by an employer retirement plan for a tax year if your employer (or your spouse’s employer) has a:

• Defined contribution plan (profit-sharing, 401(k), stock bonus and money purchase pension plan) and any contributions or forfeitures were allocated to your account for the plan year ending with or within the tax year;