A Solo 401(k) plan is not a different kind of 401(k) plan — it merely takes advantage of relaxed rules that apply when the only plan participant is the owner (or the owner and his or her spouse). The Solo 401(k) is available to self-employed individuals and business owners with no full time W-2 employees other than themselves or a spouse. (A self-employed individual who has employees would generally be required to make contributions for those other employees and follow strict nondiscrimination and administrative rules of the 401(k) plan.) Employing independent contractors (1099 workers) would not necessarily disqualify a self-employed individual from a Solo 401(k). Sole proprietorships, partnerships, LLCs and corporations (including both subchapter S and C corporations) would qualify. (Code Sec. 401(a)(35)(E)(iv))

Federal law generally allows plans to be designed to exclude the following types of employees: