Plan contribution when there is no compensation.

[Tom]

A sole proprietor has a small loss on Sch C.  The plan has no required contribution source.  He made a deposit of $7,000 during 2023.  I'm thinking with no compensation coudl he still make a catch-up deferral?  Seems he could since that is allowable over plan limits such as compensation?

Thank you.

[Lou S.]

He has no income, he has no deferral.

Seems like one course of correction could be a  415 refund along with earnings.

[Bill Presson]

You can’t defer more than you earn. You can have catchup contributions go above compensation only if there is an employer contribution to push the number up. 
 

But with zero compensation, that’s not an option either. 
 

Maybe he doesn’t deduct something this year so he has income to defer on?