SEP IRA and solo 401(k) deadlines for 2026

The SEP IRA contribution deadline for 2026 is the due date of the business’s 2026 tax return, including extensions. For a calendar-year S corporation that is March 15, 2027, or September 15, 2027 on extension. For a sole proprietor or single-member LLC it is April 15, 2027, or October 15, 2027. A solo 401(k) has the same date for the employer’s contribution, but the owner’s own deferral is fixed much earlier, and how early depends on the entity.

That split is where owners lose a year of contributions. An S corporation owner who decides in February to “max out the solo 401(k)” finds that the deferral half had to come out of 2026 paychecks. A sole proprietor reads that the plan had to exist by December 31 and gives up, when a first-year exception added in 2022 still applies. This post sets out each date by plan and entity with its source, the 2026 limits, a worked comparison, and the entries the books need, which the broker pages skip. Ledgerbrook keeps books; it does not give investment advice or prepare returns, so pick the plan with your CPA or adviser.

SEP IRA and solo 401(k) deadlines for tax year 2026

Step	Sole proprietor or single-member LLC	S corporation	Source
Set up a SEP	Apr 15, 2027 (Oct 15 on extension)	Mar 15, 2027 (Sep 15 on extension)	IRS SEP FAQs
Fund the SEP	Apr 15, 2027 (Oct 15 on extension)	Mar 15, 2027 (Sep 15 on extension)	IRS SEP FAQs
Adopt a solo 401(k) that takes 2026 deferrals	Dec 31, 2026; a first plan can be adopted by Apr 15, 2027	Before the 2026 payroll the first deferral comes out of	IRC §401(b)(2)
Elect the 2026 deferral	Dec 31, 2026; for a first plan, by Apr 15, 2027	Before the paycheck it comes out of	Treas. Reg. §1.401(k)-1(a)(3)(iv), (a)(6)(iii)
Pay in the 2026 deferral	By the return due date for the deduction, unless the plan sets an earlier date; a first plan by Apr 15, 2027, with no extension	Withheld from 2026 paychecks, then sent to the plan	IRC §404(a)(6), §401(b)(2)
Make the 2026 employer contribution	Apr 15, 2027 (Oct 15 on extension)	Mar 15, 2027 (Sep 15 on extension)	IRC §404(a)(6)
Adopt a new solo 401(k) for employer contributions only	Apr 15, 2027 (Oct 15 on extension)	Mar 15, 2027 (Sep 15 on extension)	IRC §401(b)(2)
W-2 showing the owner’s deferral	No W-2	Feb 1, 2027	Form W-2 instructions

The SEP rows come from the IRS: “You can set up a SEP plan for a year as late as the due date (including extensions)”, and “You must deposit contributions for a year by the due date (including extensions)” (IRS, Retirement plans FAQs regarding SEPs). The employer contribution to a 401(k) follows IRC §404(a)(6), which treats a contribution paid by the return due date, including extensions, as paid on the last day of the year. A partnership or multi-member LLC files its return by March 15, 2027, like an S corporation, and a partner’s deferral election is due by the last day of the partnership’s year.

None of these dates is the April 15 personal IRA deadline people often have in mind. An S corporation owner’s SEP is due a month earlier, because the company’s return is.

The S corporation owner’s deadline is the last 2026 payroll

An S corporation owner who works in the business is its employee, and a 401(k) deferral is a choice to take less pay. It has to be elected before the pay it comes out of is available, and for an employee that means before each paycheck (Treas. Reg. §1.401(k)-1(a)(3)(iv)). There is no route to defer 2026 salary after the last 2026 payroll has run. Only the employer’s contribution, up to 25% of the owner’s W-2 wages, can still be made between January and the return due date.

Three practical consequences:

• The deferral shows on the W-2. It is reported in box 12 with code D for a pre-tax deferral or code AA for a Roth one. It comes off box 1 when pre-tax, but stays in boxes 3 and 5, because Social Security and Medicare tax still apply to it. A deferral the payroll never withheld cannot be added to the W-2 afterward.
• Distributions do not count. The 25% employer contribution and the deferral are both measured on W-2 wages. A low salary with large distributions caps both. What a defensible salary looks like is in S corp reasonable salary.
• High earners make catch-ups as Roth. From 2026, an employee whose 2025 Social Security wages from the employer were over $150,000 must make any catch-up contribution as a Roth contribution (IRC §414(v)(7); Notice 2025-67). An S corporation owner paid more than $150,000 in 2025 needs a plan that offers Roth deferrals before making a 2026 catch-up. Sole proprietors have self-employment income, not wages, so the rule does not reach them.

The year-end payroll steps, including the last chance to change a deferral, are in the year-end payroll checklist.

The sole proprietor’s deadline, and the first-year exception

A sole proprietor’s or partner’s earnings are treated as paid on the last day of the year, so “a self-employed individual may not make a cash or deferred election with respect to compensation for a partnership or sole proprietorship taxable year after the last day of that year” (Treas. Reg. §1.401(k)-1(a)(6)(iii)). For a plan that already exists, the deferral election is due December 31, 2026, even though the money can follow later. For the deduction, a contribution paid by the return due date, including extensions, counts for 2026 under IRC §404(a)(6). Plan documents and providers can set an earlier date for deferrals, so read yours.

The exception is for a sole proprietor’s first plan. Since SECURE 2.0 (section 317) amended IRC §401(b)(2), an individual “who owns the entire interest in an unincorporated trade or business, and who is the only employee” can adopt a new 401(k) after the year ends and still make deferrals for that first year, if they are made “before the time for filing the return of such individual for the taxable year (determined without regard to any extensions).” For 2026 that means a plan adopted, and the deferral paid in, by April 15, 2027. Three limits on it:

• First plan year only. It is a way to start late, not a way to defer late every year.
• No extension. The deferral has to be in by April 15, 2027 even if the return is extended to October.
• Not for corporations or owners with employees. An S corporation is not an unincorporated business, and a business with an employee other than the owner does not qualify.

Several answer boxes still say every solo 401(k) must be opened by December 31 to take employee deferrals. That is right for an S corporation and for a plan that already existed, but not for a sole proprietor’s first plan since this change.

2026 contribution limits

Limit for 2026	Amount	Applies to
Employee deferral	$24,500	Solo 401(k) only
Catch-up, age 50 or over	$8,000	Solo 401(k) only
Catch-up, ages 60 to 63	$11,250 instead of $8,000	Solo 401(k) only
Total contributions per person	$72,000, plus any catch-up	SEP and solo 401(k)
Compensation counted	Up to $360,000	SEP and solo 401(k)
Minimum pay that requires an employee to be covered in a SEP	$800	SEP only
Prior-year wages above which catch-ups must be Roth	$150,000	Solo 401(k) only

All figures are from IRS Notice 2025-67. The employer contribution to either plan is up to 25% of an employee’s pay. For a self-employed owner, the 25% works out to 20% of net earnings from self-employment, which is net profit minus the deductible half of self-employment tax (IRS Publication 560). A SEP has no employee deferral and no catch-up.

What each plan allows at $96,000

The same $96,000, earned once as S corporation W-2 wages and once as a sole proprietor’s net profit, with a $24,000 deferral where the plan allows one (under the $24,500 limit; owner under age 50):

	S corp, $96,000 W-2 wages	Sole proprietor, $96,000 net profit
Base for the employer contribution	$96,000 of wages	$89,217.82 (net profit minus $6,782.18, half of self-employment tax)
Employer contribution	$24,000 (25%)	$17,843.56 (20%)
SEP total	$24,000	$17,843.56
Employee deferral	$24,000	$24,000
Solo 401(k) total	$48,000	$41,843.56
When the employer part is due	Mar 15, 2027	Apr 15, 2027
When the deferral is due	In 2026 payrolls	Elected by Dec 31, 2026

Self-employment tax is 15.3% of 92.35% of the $96,000, or $13,564.37, and half of it is deductible. At this income the solo 401(k) allows about twice what a SEP does, because the deferral is added on top of the employer contribution rather than counted inside it. The SEP is simpler to open and has no annual filing. A solo 401(k) generally has to file Form 5500-EZ once its assets reach $250,000 at year end (IRS, One-participant 401(k) plans). A solo 401(k) is only for an owner with no employees other than a spouse. A SEP with employees has to give each eligible employee the same percentage of pay the owner takes.

How the books record each contribution

This is the part broker pages skip, and the part a preparer checks first. Where the contribution goes in the books depends on the entity, and a contribution coded to the wrong account ends up on the wrong line of the return.

S corporation: deferral through payroll

The owner’s deferral is part of gross wages. It goes to Officer Compensation like the rest of the pay, and the amount withheld sits in 401(k) Payable until the company sends it to the plan. A monthly payroll of $8,000 with a $2,000 deferral and $700 of federal income tax withheld (state tax left out to keep the example short):

Date	Account	Debit	Credit
Nov 30, 2026	Officer Compensation	8,000.00
Nov 30, 2026	Employer Payroll Taxes	612.00
Nov 30, 2026	Business Checking (net pay)		4,688.00
Nov 30, 2026	Payroll Taxes Payable		1,924.00
Nov 30, 2026	401(k) Payable		2,000.00

Payroll Taxes Payable holds the owner’s $612 of Social Security and Medicare, the company’s matching $612 and the $700 withheld. The bank shows a $4,688 net pay transfer that day, and the deferral leaves in its own transfer when the company remits it:

Date	Account	Debit	Credit
Dec 2, 2026	401(k) Payable	2,000.00
Dec 2, 2026	Business Checking		2,000.00

Twelve such payrolls give the $96,000 of wages and $24,000 of deferrals in the comparison above. 401(k) Payable should be at zero once the last remittance clears; a balance left at year end means money withheld from the owner that the plan never received. How the payroll accounts tie to the bank is in payroll reconciliation.

S corporation: employer contribution after year end

The company deducts its contribution for 2026 even when it pays in March, so the books should carry the expense in 2026. Ask your preparer whether they want it booked at December 31 or will add it as an adjusting entry:

Date	Account	Debit	Credit
Dec 31, 2026	Retirement Plan Contributions	24,000.00
Dec 31, 2026	Retirement Contributions Payable		24,000.00
Mar 10, 2027	Retirement Contributions Payable	24,000.00
Mar 10, 2027	Business Checking		24,000.00

Retirement Plan Contributions is an expense account; the deduction goes on Form 1120-S, line 17 (pension, profit-sharing, etc., plans). The employer contribution is not wages and does not go on the owner’s W-2. For an S corporation SEP, the same two entries apply with the SEP contribution in place of the 401(k) one.

Sole proprietor: not a business expense

A sole proprietor’s contributions for themselves are deducted on the owner’s Form 1040, on Schedule 1, line 16, not on Schedule C. Paid from the business account, they are owner withdrawals, the same as any personal payment:

Date	Account	Debit	Credit
Dec 30, 2026	Owner Draws	24,000.00
Dec 30, 2026	Business Checking		24,000.00
Apr 13, 2027	Owner Draws	17,843.56
Apr 13, 2027	Business Checking		17,843.56

Coding the owner’s contribution to an expense account lowers Schedule C profit, which lowers self-employment tax and the contribution limit itself, and the preparer has to undo it. Contributions the business makes for employees, in a SEP, are a business expense and go on Schedule C, line 19. Which owner items stay off Schedule C is covered in Schedule C expense categories.

Common questions about SEP IRA and solo 401(k) deadlines

Is the SEP contribution 20% or 25%?

Both, depending on who is covered. A SEP allows up to 25% of an employee’s pay, including an S corporation owner’s W-2 wages. For a self-employed owner, the 25% is applied to earnings that are themselves reduced by the contribution, which works out to 20% of net profit after the deductible half of self-employment tax (IRS Publication 560).

Can I still contribute to a SEP IRA for 2025?

Not for a calendar-year business. The latest 2025 deadline was October 15, 2026, for a sole proprietor whose return was on extension; an S corporation’s extended deadline was September 15, 2026. Contributions made now count for 2026.

Does a SEP have to be set up before year end?

No. A SEP for 2026 can be set up as late as the business’s 2026 return due date, including extensions, and funded by the same date.

Is there a deadline to open a solo 401(k)?

For deferrals, December 31 of the year for an S corporation, and for a sole proprietor whose plan already exists. A sole proprietor’s first plan can be opened by April 15 of the next year and still take that year’s deferrals. A plan that will take only the employer contribution can be adopted by the return due date, including extensions (IRC §401(b)(2)).

Can I get an extension for my solo 401(k) contribution deadline?

For the employer contribution, yes: extending the business return extends it. For the employee deferral, no. The election is due by December 31 (or before the paycheck, for an S corporation), and a sole proprietor’s first-year deferral must be in by April 15 regardless of extension.

Can an S corp owner contribute to a solo 401(k)?

Yes, if the company has no employees other than the owner and a spouse. Both parts are measured on W-2 wages: the deferral through payroll in the year, and the employer contribution of up to 25% of wages by the 1120-S due date.

Can I have a SEP IRA and a solo 401(k)?

From the same business, it is complicated and rarely useful, because both count toward the same $72,000 total per person. The IRS model SEP, Form 5305-SEP, says not to use it if you “currently maintain any other qualified retirement plan.” Ask the plan provider before opening a second plan.

What is the 3-of-5-year rule for SEPs?

It decides which employees a SEP must cover. Any employee who has worked for you in 3 of the last 5 years, is at least 21 and was paid at least $800 in 2026 must be included, under the IRS model plan’s terms (IRS SEP FAQs). It does not apply to a business with no employees.

Questions about which brokerage to use, how investments grow or whether to choose a Roth, are not bookkeeping questions and are left to your adviser. Other year-end moves with December and March deadlines are in year-end tax planning.

When the books are not ready for the deadline

Every number on this page starts from the books. An S corporation needs year-to-date W-2 wages per person to size the employer contribution, and a sole proprietor needs a net profit figure that will hold once the return is prepared. When months of 2026 are unreconciled, the contribution is a guess: too high, and the excess has to be corrected; too low, and part of the deduction is lost. Catch-up bookkeeping brings the missing months current from the bank statements, so the figure for the contribution is the figure on the return. Ledgerbrook charges $99 per month of backlog. How the S corporation’s owner payroll and distributions are kept is in S-corp bookkeeping.

$99per month of backlog20% off 6+ months

When to hand this off: if your 2026 books are more than two months behind, or you cannot say what this year’s W-2 wages or net profit are without waiting for the preparer, the contribution waits on the books. A free file review tells you which months are missing and what catching up costs, in writing, before you commit. The catch-up bookkeeping page has the full scope.