How to Add Your Spouse to Your Solo 401k Plan

A Solo 401k plan is a retirement plan for business owners with no employees. This includes part-time employees who are at least 21 years of age and have worked over 500 hours per year for 3 straight years. 

However, there is only one exception to this rule – your spouse. If they work in your business, they can join your Solo 401k plan and double your household’s contribution limits.

This article breaks down how it works, the benefits, and what you need to know to stay compliant.

📝 Before we begin, make sure to download the Solo 401k Handbook: Everything you need to know about the Solo 401k in a handy PDF format.

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The Solo 401k Handbook

Everything you need to know in a handy ebook format.

Why Add Your Spouse to Your Solo 401k Plan?

Running a business together isn’t just about teamwork. For couples, it’s also an opportunity to maximize their retirement savings.

When your spouse works in your business, they can legally participate in your Solo 401k. If they help in the business — full-time or part-time — they qualify. 

Here’s some of the benefits worth considering:

✅ Double your contribution limits – In 2025, a Solo 401k plan’s contribution limit is $70,000 ($77,500 if 50+), up from $69,000 ($76,500 if 50+) in 2024. With your spouse participating, your household limit jumps to $140,000 ($155,000 if both are 50+). That’s twice the tax-deferred or tax-free retirement savings.

✅ Reduce your taxable income – The more you contribute, the lower your taxable income. With two contributors, you maximize deductions and keep more of your earnings. If you opt for Roth contributions, you lock in tax-free withdrawals later.

✅ Accelerate retirement savings – A Solo 401(k) already has the highest contribution limits of any retirement plan. With two participants, you’re growing wealth at double the speed.

✅ Maintain Solo 401(k) status – Even with your spouse included, your plan still qualifies as a Solo 401(k). That means you keep all the benefits without needing a more complex or expensive retirement plan.

✅ Expand your investment options – You and your spouse each have separate accounts, allowing for diverse investment strategies. Whether it’s real estate, stocks, or alternative assets, you have more flexibility to build your ideal portfolio.

Additionally, keeping separate accounts makes it cleaner to track each participant’s contributions, investments, and rollovers.

In practice, it means that:

Does Your Spouse Qualify for Your Solo 401k?

Your spouse can join your Solo 401(k), but there are a few eligibility rules to keep in mind. First, they must actively work for your business — either full-time or part-time. Second, they cannot own another business with W-2 employees, per controlled group rules.

Should Your Spouse Be an Employee or a Business Partner?

One of the biggest questions business owners ask is: Does my spouse need to be a W-2 employee or a business partner to join the Solo 401(k)?

The short answer: It doesn’t matter. Both employees and business partners are eligible as long as they receive earned income from the business.

The longer answer: It depends on your business structure. Your spouse’s classification will determine how they receive income and what paperwork is involved.

Which Business Structures Allow a Spouse in a Solo 401(k)?

No matter your business entity, you can add your spouse to your Solo 401(k). But the process varies depending on how your business is set up. Let’s break it down.

Sole Proprietorship

If you’re the sole owner, your spouse must be hired as a W-2 employee to qualify for the Solo 401(k). Their contributions will be based on their W-2 wages from the business.

Partnership

If you and your spouse co-own a partnership, they’ll be included as a partner. Their income will be reported on a Schedule K-1 (Form 1065), and their Solo 401(k) contributions will be based on their share of partnership earnings.

LLC: Sole Proprietor vs. Corporate Tax Treatment

If your LLC is taxed as a sole proprietorship, it follows the same rules as a standard partnership. Your spouse’s earnings are reported via a K-1 (Form 1065).

If your LLC is taxed as an S corporation or C corporation, both you and your spouse will receive W-2 wages, just like a traditional employer-employee setup.

S Corporation & C Corporation

If your business is structured as an S corp or C corp, both you and your spouse will receive W-2 wages. Their Solo 401(k) contributions will be based on their salary.

Steps to Add Your Spouse to Your Solo 401k

Your spouse can either open their own Solo 401k or be added to your existing plan. Either way, their funds stay separate. Under the same plan, you both contribute, but your contributions, funds, and investments never mix. Each person has their own bank and brokerage accounts to keep everything properly organized.

Solo 401k Plan Structure Without a Spouse

Here’s what a typical Solo 401k plan structure looks like WITHOUT a spouse included:

When you open a Solo 401k, you get 3 separate accounts:

✅ Pre-tax – this is your traditional pre-tax account

✅ Roth – this is your post-tax contributions

✅ Optional after-tax – used for mega backdoor Roth conversions

Solo 401k Plan Structure With a Spouse

With Solo401k providers such as Carry, you and your spouse typically will each get: 

✅ Separate accounts and logins

✅ Individual bank and brokerage accounts

✅ Contributions and investments that never mix

Here’s what a typical Solo 401k plan structure looks like WITH a spouse included:

Even though you’re both under one Solo 401k plan, your funds are managed like two separate plans. You each get your own separate bank and brokerage accounts, organized by contribution type. Your investments and contributions stay separate, even though they’re part of the same plan. 

📌 Learn more about the Carry Solo 401k Plan.

Do I Need a New Solo 401k to Add My Spouse?

No, you don’t need a new Solo 401k to add your spouse. Your plan provider can amend the existing plan to include your spouse. Once added, they will have their own bank and brokerage accounts, allowing them to contribute, roll over funds, and make investments separately.

What if Your Spouse Stops Working in the Business?

If your spouse stops working in your business, they can still keep their Solo 401k plan. They don’t have to withdraw or rollover their funds and can continue investing. However, they won’t be able to make new contributions unless they’re actively involved in the business again.

How Co-Investing Works

What happens if you and your spouse want to make a large investment together using your Solo 401k?

You and your spouse can pool your funds to buy an asset under the plan’s name while keeping your individual ownership percentages recorded at the plan level.

✏️ For example: 

You and your spouse want to buy an investment property for $100,000. You contribute $70,000, and your spouse contributes $30,000. When the funds are transferred to the escrow company, your 70:30 ownership ratio gets recorded in the plan, not on the property’s title. The property is legally owned by the Solo 401k plan trust.

All income and expenses can be handled through either your account or your spouse’s account and reconciled at the end of the tax year. All rental income or expenses incurred could be accepted and paid through one designated account. This simplifies transactions, so tenants don’t need to write two separate checks for rent.

However, the net income from the investment must be split according to the ownership ratio at least once a year. Let’s say the rental property earns $10,000 in net income, $7,000 goes to your account and $3,000 goes to your spouse’s.

Eligibility

For your spouse to be eligible to be added to the plan, they must actively work for the business, at least on a part-time basis, and not be the owner of any other business that has W-2 employees, per controlled group rules.

Employee or partner?

One of the most common questions around adding your spouse into your Solo 401k is if they need to be a W-2 employee or a partner in order to be eligible.

The short answer is that it doesn’t matter if they’re a W-2 employee or a partner in your business. In both situations, you and your spouse can both contribute to a Solo 401k. However, note that they must earn compensation from the business and can only contribute to the plan what they earn each year.

The longer answer is that whether they’re added as a W-2 employee or a partner largely depends on what type of business structure you operate as.

Wrapping Up

Adding your spouse into your Solo 401k plan can be a huge advantage. Your household Solo 401k contribution limits get doubled. Each of you can contribute up to the maximum of $70,000 for 2025.

Your spouse qualifies whether they work as an employee or a co-owner, and any business entity can add a spouse to a Solo 401k. You can either contribute under the same plan with separate accounts or open completely separate plans. Sharing a plan lets you pool funds for larger investments, like real estate.

There are no strict time or income requirements for your spouse. As long as they earn employment income from your business, they’re eligible to participate in the Solo 401k.

📌 Curious about adding your spouse to your Carry Solo 401k? Click here to learn how it works.

Disclaimer: The information contained in this article is intended for educational purposes only and should not be construed as financial, investment, or legal advice. Solo 401(k) plans and related regulations are complex and may vary based on individual circumstances. This article simplifies certain concepts for general understanding and does not cover all aspects or potential implications. It is crucial to seek professional advice from a qualified financial advisor, tax professional, or attorney before making any decisions related to your Solo 401(k) plan.

Carry Lab is an educational service provided by The Vibes Company, Inc, (“TVC”). No communication by Carry Lab, TVC, or any of its affiliates (collectively, “Carry”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Any material provided is for information purposes only, and is not intended as a recommendation, offer, or solicitation to open a brokerage account, open a retirement plan, engage an investment advisor or engage in any investment strategy. Having a Carry Lab membership does not create an investment advisory relationship or brokerage relationship with any affiliates of TVC. Any references to past performance, educational discussions about investment strategies, or market analysis do not guarantee future results. Investing involves risk, including the potential loss of principal. The educational content provided should not be used as a substitute for professional financial, investment, tax, or legal advice. The accounts, strategies and/or investments discussed in this material may not be suitable for all individuals. The appropriateness of a particular account or investment strategy will depend on individual circumstances and objectives.

FREE PDF DOWNLOAD

The Solo 401k Handbook

Everything you need to know in a handy ebook format.