Is IRS 415(c) limit applied per 401k plan or per individual person?
I'm trying to understand how the IRS 415(c) contribution limits actually work - is it per retirement plan or per individual? The IRS website seems to suggest it's per plan, not per person, but I want to make sure I'm interpreting this correctly. If it's really per plan, then theoretically if someone has 2 separate employers with 401k plans that offer Mega Backdoor Roth 401k options, could they contribute up to $69,000 to EACH plan (total $138,000) in a single year? That seems too good to be true, but the language makes me think it might be possible. Has anyone dealt with this situation before?
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Mateo Martinez
This is a good question with a somewhat complicated answer. The IRS 415(c) limit ($69,000 for 2025) is actually applied on a per-employer basis, not strictly per plan or per person. Here's how it works: If you have two completely unrelated employers (not part of the same controlled group), each with their own 401k plan, then yes, you could potentially contribute up to the 415(c) limit to each plan. So in theory, you could do two Mega Backdoor Roth 401k contributions up to $69,000 each. However, there are some important caveats. Your personal elective deferral limit ($23,000 for 2025) applies across ALL your 401k plans combined. So while the overall 415(c) limit might be available twice, your personal contributions are still capped. The additional amounts would need to come from employer contributions and after-tax contributions.
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QuantumQueen
•Wait I'm confused. So the $23k limit is shared between both plans, but the $69k limit isn't? So theoretically I could do $23k total between both plans for my personal contributions, and then each employer could contribute up to the rest of the $69k for each plan? That seems insane.
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Mateo Martinez
•The $23,000 elective deferral limit is a per-person limit that applies across all employer plans. So yes, that's shared between both plans - you can split it however you want, but the total can't exceed $23,000. The $69,000 limit is the total limit for all sources going into a single plan (your deferrals, employer match, employer contributions, and after-tax contributions). Since this limit applies separately to unrelated employers, you could potentially reach it twice if you have two completely separate employers with generous plans.
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Aisha Rahman
Just wanted to share my experience with this! I was in a similar situation trying to figure out the 415(c) limits when I was working two jobs. I found this tool called taxr.ai (https://taxr.ai) that actually helped me understand all the retirement contribution limits for my specific situation. You upload your tax docs and it immediately shows you what contribution limits apply to your specific situation, including 415(c) limits across multiple employers. It confirmed that yes, the 415(c) limit is per unrelated employer, not per person. Saved me from missing out on thousands in potential contributions!
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Ethan Wilson
•How accurate is this tool? I've been trying to figure out if my side gig counts as a separate employer for 401k contribution purposes. Does it help determine if employers are "related" for the 415(c) rules?
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Yuki Sato
•I'm skeptical about these tax tools. How does it know the relationship between employers? That's a pretty complex determination with controlled groups and affiliated service groups.
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Aisha Rahman
•It's been extremely accurate for me - it flagged exactly what my CPA later confirmed. The tool asks specific questions about ownership relationships between your employers to determine if they're related. For side gigs, it's particularly helpful because it analyzes whether you're truly a contractor or employee, and then applies the right contribution limits. It even explains the controlled group rules in plain language so you understand why certain limits apply to your situation.
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Ethan Wilson
Just wanted to update everyone! I took the advice and tried taxr.ai for my specific situation with multiple employers. It was actually really helpful - I uploaded my W-2s from both jobs and it immediately showed me that my employers weren't related, so I could take advantage of separate 415(c) limits. The tool even created a custom contribution strategy that maximized my tax advantages across both plans. I was able to do a full Mega Backdoor Roth in one plan while still getting the match in both! Would have never figured that out on my own.
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Carmen Flores
If anyone's struggling to get answers about this from the IRS directly, I was in the same boat last year. Called like 6 times and kept getting disconnected or waiting for hours. Finally used this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 20 minutes. They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that 415(c) limits are indeed separate for unrelated employers, and explained exactly how to document everything properly in case of an audit. Totally worth it instead of spending days trying to get through.
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Andre Dubois
•How does this even work? Isn't it just the same IRS phone line that everyone else is calling? I don't understand how they could get you through any faster.
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Yuki Sato
•Sounds like a scam to me. Nobody can magically get through to the IRS faster than anyone else. They probably just keep calling and charging you while you wait.
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Carmen Flores
•It's not magic - they use technology that continuously redials and navigates the IRS phone tree for you. When a human IRS agent finally answers, it calls your phone and connects you directly to that agent. They don't charge you while waiting - you just get notified when they've secured a connection. I was skeptical too, but it worked exactly as advertised. Saved me literally hours of frustration and hold music. The best part was getting a definitive answer on my 415(c) question from an actual IRS representative.
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Yuki Sato
I have to eat my words about Claimyr! After posting my skeptical comment, I decided to try it myself because I was desperate to resolve a similar retirement contribution question regarding 415(c) limits between my full-time job and my consulting LLC. I was honestly shocked when my phone rang about 25 minutes later and I was talking to an actual IRS tax specialist. They confirmed the separate 415(c) limits for my unrelated employers and even helped me understand how to properly document everything. The IRS agent also warned me about a common audit trigger related to high retirement contributions across multiple plans - something I would have never known. Definitely worth it for the peace of mind alone.
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CyberSamurai
One thing nobody's mentioned yet - make sure your plan documents actually allow for Mega Backdoor Roth! Just because the IRS 415(c) limit allows for it doesn't mean your specific plans do. I found out the hard way that while my plan allowed after-tax contributions, it didn't allow for in-plan conversions to Roth. Had to do more complicated rollovers to my Roth IRA instead. Check with both HR departments before assuming you can max out both plans!
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Nia Davis
•Good point! I checked and both plans do allow for in-plan conversions to Roth, so I'm good there. But I'm still confused about one thing - does having access to two 401k plans affect my backdoor Roth IRA contribution too? Or is that completely separate?
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CyberSamurai
•The backdoor Roth IRA contribution is completely separate from your 401k contributions and limits. The IRA contribution limit ($7,000 for 2025 if you're under 50) is independent of your workplace retirement plans. The only connection is through the pro-rata rule for IRA conversions, which can be affected if you have traditional IRA balances. But having multiple 401k plans doesn't directly impact your ability to do a backdoor Roth IRA. You can do both strategies simultaneously to maximize your retirement savings.
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Zoe Alexopoulos
Has anyone actually successfully contributed to two mega backdoor 401ks in the same year? My tax preparer said it would trigger an automatic audit, but I can't find any info confirming this.
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Jamal Carter
•I did it last year with no issues. Had a full-time job and a side business with a solo 401k. Made sure both employers were completely unrelated. Did full 415(c) contributions to both. No audit yet!
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Joshua Hellan
This is such a valuable discussion! I've been navigating this exact scenario myself. One thing I want to emphasize is the importance of keeping detailed records when you're contributing to multiple unrelated employer plans. The IRS may not automatically flag high retirement contributions, but if you ever get audited, you'll need to prove that your employers are truly unrelated (not part of a controlled group or affiliated service group). I keep documentation showing the separate ownership structures, different EINs, and completely independent operations. Also, don't forget about the timing - make sure you're not exceeding the annual limits within the same calendar year. I use a spreadsheet to track contributions across both plans monthly to avoid any accidental over-contributions that would need to be corrected. Has anyone dealt with the situation where one employer gets acquired mid-year? I'm wondering if that would affect the separate 415(c) limits for the remainder of the year.
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Anderson Prospero
•Great point about the acquisition scenario! I actually went through this exact situation two years ago. My startup got acquired by a larger company in July, and it immediately created a controlled group situation since both companies were now under the same parent. From what my tax attorney explained, the 415(c) limits become shared from the moment the acquisition closes, not just for the remainder of the year. So if I had already contributed $40k to my startup's 401k by July, I could only contribute an additional $29k to the acquiring company's plan for the rest of the year. The tricky part was that the acquiring company's HR didn't initially understand this limitation and almost let me contribute the full amount to their plan too. I had to provide documentation of the acquisition and my prior contributions to get it sorted out properly. Joshua, your spreadsheet tracking idea is genius - I wish I had thought of that earlier! Do you happen to track employer match contributions separately? I'm trying to figure out if those count toward the combined limit in a controlled group situation.
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