Pennsylvania (PA) Self-Employed Retirement Contribution Calculator
Tax year: 2026 · Figures for Tax Year 2026 · Source: IRS
Built and audited by the CalcSumly Engineering Team using official IRS and State Department of Revenue data.
Your Schedule C net profit before the retirement contribution deduction.
Age as of December 31. Determines your Solo 401(k) catch-up contribution tier (ages 50+, 60-63).
Solo 401(k)
Recommended$46,804
maximum contribution · 2026
Pennsylvania taxes Schedule C net profit directly and does not recognize federal above-the-line retirement deductions. PA state income tax savings are $0.
SEP-IRA
$22,304
maximum contribution · 2026
Pennsylvania taxes Schedule C net profit directly and does not recognize federal above-the-line retirement deductions. PA state income tax savings are $0.
State savings are $0 for Pennsylvania. See conformity notes below.
At $120,000 of self-employment income in Pennsylvania, a Solo 401(k) allows $46,804 maximum contribution versus $22,304 for a SEP-IRA — a difference of $24,500 in contribution capacity.
How self-employed retirement contributions work in Pennsylvania for 2026
Solo 401(k) and SEP-IRA contributions are above-the-line deductions on Form 1040 Schedule 1. They reduce federal AGI but do not affect self-employment tax (SE tax is calculated on Schedule C net profit before contributions).
Pennsylvania does not recognize federal retirement deductions. PA taxes Schedule C net profit at a flat 3.07% directly, and above-the-line retirement contributions do not reduce the PA tax base. PA state savings are $0.
Solo 401(k) vs SEP-IRA comparison
The Solo 401(k) allows a larger contribution at most income levels because it adds an employee elective deferral ($24,500) before the employer profit-sharing portion. The SEP-IRA has only the employer portion (20% of net SE compensation, capped at $72,000). At very high incomes where the Solo 401(k) base also hits $72,000, the plans become equal unless you qualify for a catch-up contribution (Solo 401(k) only).
Catch-up contributions (Solo 401(k) only)
Filers age 50-59 or 64+ add $8,000 in catch-up above the §415(c) cap. Filers age 60-63 add $11,250 (SECURE 2.0 enhanced catch-up). SEP-IRA has no catch-up at any age.
Scope and limitations
This calculator models standard deduction filers. It does not include QBI deduction, health insurance deduction, other plan types, or interactions with employer 401(k) plans from W-2 employment. Consult a tax professional and plan custodian before contributing.
Sources
- IRS Notice 2025-67 — 2026 Retirement Plan Limits (§415, §402(g), §401(a)(17))
- IRS Publication 560 — Retirement Plans for Small Business (SEP, SIMPLE, Qualified Plans)
- IRS Rev. Proc. 2025-32 — 2026 Standard Deduction Amounts
- PA Dept. of Revenue — Personal Income Tax Rates (3.07%, stable since 2004)
- PA Dept. of Revenue — Deductions and Credits (no standard deduction; limited deductions only)
- PA Dept. of Revenue — Personal Income Tax Guide
Frequently asked questions
Do retirement contributions reduce self-employment tax?+
No. Solo 401(k) and SEP-IRA contributions are above-the-line deductions on Form 1040 Schedule 1, not Schedule C deductions. SE tax is calculated on Schedule C net profit before contributions. Contributions reduce federal AGI, which lowers federal income tax and most state income taxes, but SE tax is unchanged.
What is the maximum Solo 401(k) contribution for self-employed in 2026?+
The 2026 Solo 401(k) base maximum is $72,000 (§415(c)) plus catch-up: $8,000 for ages 50-59 or 64+ and $11,250 for ages 60-63 (SECURE 2.0). The employee elective deferral is $24,500. The employer portion is 20% of net SE compensation (IRS Pub 560 formula). The elective deferral plus employer contribution cannot exceed $72,000.
What is the maximum SEP-IRA contribution for 2026?+
The 2026 SEP-IRA maximum is 20% of net SE compensation (net profit minus the deductible half of SE tax), capped at $72,000. Net SE compensation is also capped at the §401(a)(17) compensation limit of $360,000. SEP-IRA has no employee deferral and no catch-up option.
Does Pennsylvania recognize Solo 401(k) and SEP-IRA deductions?+
No. Pennsylvania taxes Schedule C net profit directly at a flat 3.07% rate and does not recognize federal above-the-line retirement plan deductions. Contributions to a Solo 401(k) or SEP-IRA reduce federal AGI, but Pennsylvania's tax base is Schedule C net profit, which is not changed by these contributions. PA state income tax savings are $0.
Why does Pennsylvania not recognize retirement deductions?+
Pennsylvania has its own income tax system based on specific classes of income. Net profit from self-employment is taxed under the 'net profits from a business' class at 3.07%. Retirement plan contributions are federal Schedule 1 adjustments that reduce federal AGI, not Schedule C reductions. Because PA does not start from federal AGI, these contributions have no effect on PA taxable income.
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