Employer Contribution to Solo 401(k) and 401(k) Match with Previous Employer

[Michael16]

I left federal service early in 2022 to pursue self-employment as a sole proprietor (no employees). During my time in federal service, I contributed to the government Thrift Savings Plan (TSP), where I also received a 5% match. Upon starting my own small business, I opened a Solo 401(k) to contribute tax deferred money as both employee and employer.

For the employee contributions (elective deferrals), I understand I am limited to $20,500 for 2022, which includes the contributions I made in my TSP earlier in 2022.

For the employer side (employer nonelective contributions) of the Solo 401(k), my limit is 20% of my net profit after subtracting half the self-employment tax (not to exceed $61,000 for the elective and nonelective).

What happens to the match I received from the TSP during my time as a federal employee for 2022? Do I need to include this in my calculations for my Solo 401(k) or is this separate?

[dmertz · Accepted solution]

The matching contribution made to your account in the federal TSP is an employer contribution and does not in any way factor into the contributions that you are permitted to make to the solo 401(k).  Employer contributions are subject to per-plan limits, not per-individual limits.