Personal 401k CatchUp Contributions and New / Catch-up IRA

[cornyb4]

If your self-employed company didn't make any earned income, can one make a catch-up contribution into a previously established personal 401-K? If I have a 401k that the company contributes to, but I didn't contribute anything to, can I make an IRA contribution of $2,000 plus a catch-up contribution of $6,500 (over 50 age)?

[DavidD66 · Accepted solution]

Eligibility and the amounts you can contribute to a Solo 401(k) and a traditional IRA are calculated/determined separately.  If you have earned income of at least $7,000 you can contribute that amount to a Traditional IRA ($6,000 annual limit for 2022 + $1,000 catch-up if over 50).   If you are self-employed sole proprietor, and your business did not have any earned income, neither you nor the business can contribute to your solo 401(k).   

[dmertz]

If your net profit from self-employment is zero or you have a loss, you have no compensation from self-employment from which to make any 401(k) or IRA contribution.