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No EIN. Did I mess up my solo 401k?

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  • No EIN. Did I mess up my solo 401k?

    I opened a Solo 401k last year with Etrade and they told me I could use my SSN and did not have to apply for an EIN. However, I've subsequently read in a few places that an EIN is needed to open a Solo 401k. Did Etrade give me the wrong information?? Is there anything I can/need to do at this point to correct? Thanks very much for your help!

  • #2
    The IRS does not require the sponsor of a one-participant 401k plan to obtain an EIN until such time as they must communicate with the IRS. For most one-participant 401k plans this occurs if/when the plan's year-end balance exceeds $250K, requiring the filing of Form 5500-EZ. If this balance is not reached it would not be required until filing the final Form 5500-EZ on plan termination.

    However, nothing prevents the one-participant 401k provider from requiring an EIN as a matter of policy. If E-Trade doesn't require it, you are fine until the above requirements occur or other communication with the IRS becomes necessary.

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    • #3
      So it's not too late to add an EIN to my current solo 401k when it becomes necessary?

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      • #4
        Surprised they let you open it.

        Spiritrider probably has this one right as usual.

        I guess you could add it. It was probably easier just to get it before. I mean, it's free and takes literally 30 seconds to get online.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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        • #5
          OP, I did the exact same thing January of this year. I opened a new solo 401k with ETrade for my sole prop spouse. I contributed a few thousand into my roth solo 401k at the time just to make sure it was ready roll, with plans to fill it later in the year. No problem.

          Then, I got a letter from ETrade in August that there was an issue with my account. They basically said the SSN wasn't sufficient and made me re-submit an application with an EIN (which, yes, took me 30 seconds to get online on the IRS site). Kind of a strange series of events, but now it's fine and the same is account is back open.

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