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Subject Expert
Accenture1 - I did. Did you? That’s exactly the section I was referring to.
“Total annual contributions (annual additions) to all of your accounts in plans ***maintained by **one employer** (and any related employer)*** are limited”
In their Example 1 in that section, “Greg” is able to contribute a total of *$76,500* to 401k accounts. He maxes out his individual contributions at $19,500 via the 401k with his W-2 employer, but then he also makes a max contribution of $57k, in his capacity as employer, to his solo 401k for his other job where he is an independent contractor. This example proves the point: the $57k (now $61k) overall cap is *not* a universal overall cap requiring coordination between unrelated employers, although the $19.5k (now $20.5k) individual contribution limit does apply across plans like an IRA.
“Example 1: In 2020, Greg, 46, is employed by an employer with a 401(k) plan, and he also works as an independent contractor for an unrelated business and sets up a solo 401(k). Greg contributes the maximum amount to his employer’s 401(k) plan for 2020, $19,500. He would also like to contribute the maximum amount to his solo 401(k) plan. He is not able to make further elective deferrals to his solo 401(k) plan because he has already contributed his personal maximum, $19,500. He would also like to contribute the maximum amount to his solo 401(k) plan.
Greg is not able to make further elective salary deferrals to his solo 401(k) plan because he has already contributed his personal maximum, $19,500, to his employer’s plan. However, he has enough earned income from his business to contribute the overall maximum for the year, $57,000. Greg can make a nonelective contribution of $57,000 to his solo 401(k) plan. This $57,000 limit is not reduced by the elective deferrals Greg made under his employer’s plan because the limit on annual additions applies to each plan separately.”