Uni K for SCorp

[Pammie57]

Client has a side company - one person S Corp.  He works full-time for another employer where he contributes $10,500 to his 401k plan.  He wants to set up  a 401k PSP  for 2020 if possible for his S Corp.  Would it have to be effective 11/1 or could it be 1/1/2020 but  only defer on compensation paid after 11/1?  I assume he would be limited to $15,500 (he's over 50) ....Does the plan have to be adopted by 12/31 or before in order for him to defer on his w-2 wages from 11/1?   

[Bird]

The plan has to be adopted and effective before money is withheld from his pay; that's about all.

[Pammie57]

Ok good so he can write himself a big ole check and defer from it before year end?

. 

[Bill Presson]

1 hour ago, Pammie57 said:

Ok good so he can write himself a big ole check and defer from it before year end?

. 

Make sure he signs/dates an election form prior to doing that.

[imchipbrown]

Don't forget he can only defer from W-2 wages.  Also, 401(k) limit spans employers, though it seems you've considered this in your question.