Roth 401K Partnership Match
Facts – New client that is a partner in a partnership. He receives a Guaranteed Payment. He has a Roth 401(k) elective deferral and an Employer Match. The partnership is not taking a deduction for either amount. I don’t believe the client can take a deduction on Schedule 1 of their personal return for either the deferral or the match since they are Roth Funds. If a deduction is received, it would be pre-tax, not post-tax. The client is questioning my treatment. Am I right that neither the elective deferral or the match are deductible on the personal return?
Permalink Submitted by David Mertz on Fri, 2022-09-30 17:55
The matching contribution is *not* permitted to be made to the designated Roth account. It must be made to the traditional account in the plan and is deductible on the partner’s Schedule 1 as a self-employed retirement contribution.