Retirement Plans for Food Truck Owners: Solo 401(k), SIMPLE IRA, and the Employee Question
Food truck operators who run the truck alone (or with a spouse) have access to the Solo 401(k), which offers the highest contribution limits of any small business retirement plan. Once the food truck hires employees (prep cooks, cashiers, window staff), the Solo 401(k) is no longer available and the business must transition to a plan that covers eligible employees.
Solo operator (no employees): Solo 401(k). $24,500 employee deferral + 20% of net SE income (employer contribution), up to $72,000 combined (2026). Ages 60-63 get the SECURE 2.0 super catch-up of $11,250 (total $35,750 employee deferral). It can be set up after December 31: up to the extended filing deadline for the employer contribution, and, for an unincorporated owner who is the business’s only employee (a spouse on payroll rules this out), by the unextended return due date (April 15, 2026 for 2025) for first-year deferrals.
With employees: The Solo 401(k) is terminated. Options:
- SIMPLE IRA: $17,000 employee deferral (2026; $18,100 for an employer with 25 or fewer employees) + mandatory employer match (3% of compensation or 2% non-elective). Lower employer cost because the match only applies to participating employees. Must be established by October 1. Best for food trucks with 2-5 part-time employees where few will participate.
- Safe Harbor 401(k): Higher contribution limits for the owner ($24,500 + employer match) but requires a 3% non-elective contribution or 4% match for ALL eligible employees. TPA administration costs $1,500-$3,000/year. Best when the owner wants to maximize personal contributions and has a small, stable crew.
- SEP IRA: 25% of W-2 compensation (or effectively 20% of net SE income for self-employed) for all eligible employees (the same percentage for everyone). No employee deferral. Simple to administer but expensive if the owner wants to maximize contributions and must do the same for every employee.
How does the transition work with the first employee?
What about seasonal employees?
Food trucks often hire seasonal employees (summer only, event season only). The retirement plan eligibility rules help here. Most plans require employees to work 1,000 hours in a 12-month period to become eligible. A seasonal employee who works 20 hours/week for 5 months (approximately 430 hours) does not meet the 1,000-hour threshold and is excluded from the plan. This keeps the employer’s retirement plan costs contained to year-round staff.
The SIMPLE IRA has a different eligibility rule: employees who earned $5,000 in any 2 preceding years AND are expected to earn $5,000 in the current year are eligible. A seasonal prep cook earning $3,000/summer would not meet this threshold.
Related guides:
- Food Truck Deductions Cogs
- Food Truck Entity Structure Scorp
- Food Truck Estimated Taxes Seasonal
- Food Truck Permits Licenses Sales Tax
- Food Truck Worker Classification Staff
What tax records should I keep and for how long?
The IRS generally requires you to keep tax records for 3 years from the date you filed the return or 2 years from the date you paid the tax, whichever is later. Keep records for 6 years if you underreported income by more than 25%, and indefinitely if you did not file a return or filed a fraudulent return. Employment tax records must be kept for at least 4 years. Property records (purchase price, improvements, depreciation) should be kept for as long as you own the asset plus the applicable retention period after disposition. Digital copies are acceptable as long as they are legible and can be reproduced if requested by the IRS.
What are the plan deadlines for a food truck owner?
A solo food truck owner with a Solo 401(k) elects employee deferrals by December 31 and can deposit them, along with the employer contribution, by the return due date with extensions: October 15, 2026 for a 2025 sole proprietor who files Form 4868. An owner with no employees who missed December can still adopt a new plan and make 2025 deferrals by April 15, 2026.
Once you hire prep cooks or window staff and move to a SIMPLE IRA, the plan has to be effective by October 1 of the year it starts. A truck that already had a SIMPLE IRA can restart one only on January 1.
- Deferrals you withhold from crew paychecks go in as soon as you can reasonably separate them, and no later than 30 days after the end of that month.
- Your match or 2% contribution is due by the return due date with extensions.
- A truck with 25 or fewer employees who earned at least $5,000 the prior year gets the higher SIMPLE limit automatically: $17,600 for 2025 and $18,100 for 2026.
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Yarik Yarosh, CPA. "Retirement Plans for Food Truck Owners: Solo 401(k), SIMPLE IRA, and the Employee Question." Blue Cloud CPA, September 5, 2026, updated September 23, 2026. https://bluecloudcpa.com/guides/food-truck-retirement-plans
This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.