A Keogh plan is a tax-deferred, qualified retirement plan for self-employed people and unincorporated businesses, such as sole proprietorships, partnerships, and LLCs taxed as such. It lets an owner make tax-deductible contributions that grow tax-deferred until retirement. The Internal Revenue Service no longer uses “Keogh” as an official category and now folds these arrangements into what it calls qualified plans, also called H.R. 10 plans (Source: IRS Publication 560, 2025).
A Keogh plan is a qualified retirement plan for self-employed individuals and unincorporated businesses, structured as either a defined-contribution or a defined-benefit plan. For 2026, a defined-contribution Keogh is capped at the lesser of 25% of compensation or $72,000, and a defined-benefit plan can fund toward an annual benefit of up to $290,000 (Source: IRS Notice 2025-67).
What is a Keogh plan, in plain terms?
A Keogh plan is a qualified retirement plan that a self-employed person or an unincorporated business sets up to make tax-deductible retirement contributions. Contributions grow tax-deferred, and withdrawals in retirement are taxed as ordinary income. The defining feature is who may use it: the sponsoring business must be unincorporated (Source: IRS Publication 560, 2025).
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“Keogh” is a historical name. IRS Publication 560 (2025) states the equivalence directly, describing qualified plans as “also called H.R. 10 plans or Keogh plans when covering self-employed individuals.” A Keogh is not a separate product on a shelf; it is a qualified plan whose owner happens to be self-employed.
Because the IRS treats these arrangements under general qualified-plan rules, the same underlying plan types apply: profit-sharing plans and money purchase plans on the defined-contribution side, and defined-benefit plans on the pension side (Source: IRS Publication 560, 2025).
Keogh vs. HR-10 vs. qualified plan: why the names confuse people
“Keogh,” “H.R. 10,” and “qualified plan” describe the same thing from three angles. IRS Publication 560 (2025) equates them, noting that qualified plans are “also called H.R. 10 plans or Keogh plans when covering self-employed individuals.” The confusion is a product of history, not three separate accounts existing side by side today.
Where the name came from (Eugene Keogh, H.R. 10, 1962)
The plan is named after Eugene James Keogh, a U.S. Representative from New York who championed the legislation that let self-employed people set aside tax-favored retirement money. Financial reference sources trace the enabling statute to the Self-Employed Individuals Tax Retirement Act, generally cited to 1962, and the bill number, H.R. 10, gave the plan its second nickname.
Are Keogh plans still available today? (EGTRRA 2001, legacy label)
Yes, the underlying accounts are still available, but the “Keogh” label is now legacy. Federal law once taxed self-employed Keogh plans differently from corporate plans, which is why the distinct name existed. Financial sources attribute the end of that separate treatment to the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001. Since then, IRS guidance, including Publication 560 (2025), treats these simply as qualified plans (Source: IRS Publication 560, 2025).
Who is eligible for a Keogh plan, and who is not?
A Keogh plan is available to unincorporated businesses: sole proprietorships, partnerships, and LLCs taxed as such. The self-employed owner establishes the plan and may cover eligible employees under the same terms. Eligibility turns on business structure and net earnings from self-employment, not on income level (Source: IRS Publication 560, 2025).
The people who cannot use one fall into clear groups:
- Owners of incorporated businesses acting in that capacity. The Keogh label historically applied to unincorporated owners; an incorporated business sponsors a standard corporate qualified plan instead.
- Employees acting on their own. A worker cannot open a personal Keogh. Only the business owner sponsors it, though employees may participate once the owner establishes the plan.
- People with no self-employment income. Contributions are based on net earnings from self-employment, so there must be qualifying business income to fund the plan (Source: IRS Publication 560, 2025).
How does a Keogh plan work? The two structural types
A Keogh plan works by letting an unincorporated business make pre-tax contributions into one of two structures: a defined-contribution plan or a defined-benefit plan. A defined-contribution plan fixes how much goes in each year. A defined-benefit plan fixes the target retirement benefit and backs into the required funding. Both grow tax-deferred until withdrawal (Source: IRS Publication 560, 2025).
Defined-contribution Keogh plans (profit-sharing vs money purchase)
A defined-contribution Keogh sets the input, not the payout. The business decides how much goes in each year, within the annual limits, and the eventual balance depends on contributions plus investment performance. There is no guaranteed benefit, and the account carries investment risk. IRS Publication 560 (2025) identifies two defined-contribution structures in this context:
- Profit-sharing plans. Contributions are flexible year to year. The business can vary or skip contributions based on cash flow, within the plan terms and the annual limits.
- Money purchase plans. Contributions are fixed as a set percentage of compensation each year, and the business is generally committed to funding that percentage annually.
Defined-benefit Keogh plans (actuary-funded, higher-earner edge)
A defined-benefit Keogh works like a traditional pension. Instead of setting the contribution, it sets a target annual retirement benefit, and an actuary calculates the yearly funding needed to reach it. Because the funding follows an IRS actuarial formula tied to age, income, and years to retirement, an older high earner can sometimes contribute far more than a defined-contribution plan would allow (Source: IRS Publication 560, 2025).
Keogh plan contribution limits for 2026
For 2026, a defined-contribution Keogh is capped at the lesser of 25% of compensation or $72,000, up from $70,000 in 2025. A defined-benefit Keogh is limited by an annual benefit cap of $290,000 for 2026, up from $280,000 in 2025. These figures come from the IRS cost-of-living adjustments in Notice 2025-67 (Source: IRS Notice 2025-67).
Not every line in the table below applies to every Keogh: the elective-deferral and catch-up figures apply only to plans with an employee salary-deferral feature, such as a Solo 401(k), not to a pure profit-sharing or money purchase Keogh.
| Limit (IRC section) | 2025 | 2026 |
|---|---|---|
| Defined-contribution annual additions, 415(c) | $70,000 | $72,000 |
| Defined-benefit annual benefit, 415(b) | $280,000 | $290,000 |
| Annual compensation limit, 401(a)(17) | $350,000 | $360,000 |
| Elective deferral (401(k)-type), 402(g) | $23,500 | $24,500 |
| Age-50 catch-up, 414(v) | $7,500 | $8,000 |
| Ages 60 to 63 higher catch-up, 414(v) | $11,250 | $11,250 |
Two catch-up rules matter only for older savers who use a deferral-based plan rather than a plain Keogh. The SECURE 2.0 Act of 2022 created a higher catch-up of $11,250 for participants ages 60 through 63 in both 2025 and 2026, and neither this rule nor the standard catch-up applies to a profit-sharing or money purchase Keogh, which has no salary-deferral feature (Source: IRS Notice 2025-67).
Why a self-employed owner cannot simply contribute 25% (reduced-rate 20% math)
A self-employed owner cannot apply the plan’s stated percentage directly to net profit. The IRS requires a circular “reduced rate” calculation that nets out the deduction for one-half of self-employment tax and the contribution itself. The formula is: reduced rate equals plan rate divided by (1 plus plan rate) (Source: IRS, “Self-employed individuals: Calculating your own retirement plan contribution and deduction”).
In practice, a 25% plan rate becomes an effective 20% of net self-employment earnings, and a 10% plan rate becomes roughly 9.0909% (Source: IRS, same worksheet). This is why a self-employed owner’s real ceiling is often described as “20% of net earnings,” and why many owners use the Publication 560 rate table to run the number.
How is a Keogh plan taxed?
A Keogh plan follows the standard tax pattern of a pre-tax qualified plan. Contributions are generally tax-deductible in the year made, investments grow tax-deferred, and distributions in retirement are taxed as ordinary income. A true Keogh holds pre-tax dollars only and has no built-in Roth option; a saver who wants Roth treatment in an owner-only plan generally uses a Solo 401(k) instead (Source: IRS Publication 560, 2025).
Early withdrawals and required minimum distributions
Distributions from a Keogh taken before age 59.5 are generally subject to a 10% additional tax on the taxable portion, on top of ordinary income tax, unless an exception applies (Source: IRS Topic No. 558). Recognized exceptions include separation from service at age 55 or later, a series of substantially equal periodic payments under section 72(t), disability, and certain medical expenses above 7.5% of adjusted gross income (Source: IRS Topic No. 558).
On the back end, required minimum distributions from a qualified plan generally must begin at age 73 under current rules, rising to age 75 for individuals born in 1960 or later beginning in 2035 (Source: IRS, required minimum distributions FAQs). Because those withdrawals are taxed as ordinary income, some savers coordinate the timing of a Roth conversion with them to manage which years carry the heaviest taxable income; our guide on how much to convert to Roth and our overview of required minimum distributions for 2026 cover this in detail.
Paperwork and Form 5500-EZ ($250,000 threshold)
Keogh plans carry heavier administrative duties than IRA-based accounts. A defined-benefit Keogh needs an actuary, and defined-contribution plans require ongoing recordkeeping. For a one-participant plan, once total plan assets exceed $250,000 at the end of the plan year, the plan generally must file IRS Form 5500-EZ annually, and setup and maintenance costs run higher than for simpler self-employed accounts (Source: IRS, 2025 Instructions for Form 5500-EZ; IRS Publication 560, 2025).
Keogh vs. SEP-IRA vs. Solo 401(k): which fits?
For most self-employed savers, a SEP-IRA or a Solo 401(k) reaches similar dollar limits with far less paperwork than a Keogh, which is why those two accounts have largely replaced the traditional Keogh. The defined-benefit Keogh keeps a narrow edge in one case: an older, high-earning owner who wants to contribute well above the defined-contribution cap (Source: IRS Publication 560, 2025).
| Feature | Keogh (qualified plan) | SEP-IRA | Solo 401(k) |
|---|---|---|---|
| Who it is for | Unincorporated self-employed and their eligible employees | Self-employed and small employers | Owner-only businesses (and spouse) |
| 2026 defined-contribution cap | Lesser of 25% comp or $72,000 | Lesser of 25% comp or $72,000 | Up to $72,000 (deferral plus profit share) |
| Defined-benefit option | Yes, up to $290,000 benefit (2026) | No | No |
| Roth contributions | No (pre-tax only) | Roth SEP allowed under SECURE 2.0, plan permitting | Yes, if the plan offers a Roth account |
| Administrative burden | Higher; Form 5500-EZ once assets exceed $250,000; actuary for DB | Low | Moderate; Form 5500-EZ once assets exceed $250,000 |
The Roth point is where popular articles get muddy, so here it is plainly: a true Keogh accepts pre-tax money only. A saver who wants Roth treatment inside an owner-only plan generally uses a Solo 401(k) with a designated Roth account rather than a Keogh, and rolling a pre-tax balance into Roth is a separate, taxable conversion event. If you are weighing that path, our explainer on the Roth conversion break-even point and the net investment income tax for 2026 can help you size the tax impact before you act. The narrow case where a Keogh still wins is the defined-benefit plan: an owner in their 50s or 60s with high, stable income and few employees may fund above the $72,000 ceiling toward the $290,000 benefit target for 2026, accepting the actuarial cost that comes with it (Source: IRS Notice 2025-67).
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Frequently asked questions
Is a Keogh plan the same as an HR-10 plan?
Yes. IRS Publication 560 (2025) uses “H.R. 10 plans” and “Keogh plans” as alternate names for qualified plans covering self-employed individuals. The H.R. 10 label comes from the bill number of the original enabling legislation. Today the IRS files both terms under the general category of qualified plans rather than treating Keogh as a separate account type (Source: IRS Publication 560, 2025).
What is the difference between a Keogh plan and a 401(k)?
A Keogh is a qualified plan for unincorporated self-employed businesses, structured as a defined-contribution or defined-benefit plan with no employee salary-deferral feature in its classic forms. A 401(k) is an employer plan built around employee salary deferrals, with a 2026 elective-deferral limit of $24,500. An owner-only business often uses a Solo 401(k) for its deferral and Roth flexibility (Source: IRS Notice 2025-67).
Who is eligible for a Keogh plan?
A Keogh plan is limited to self-employed individuals and unincorporated businesses, such as sole proprietorships, partnerships, and LLCs taxed as such. The owner establishes it and funds it from net earnings from self-employment; eligible employees may participate only after the owner sponsors the plan. Owners of incorporated businesses and people without self-employment income are not eligible (Source: IRS Publication 560, 2025).
Are Keogh plans still available?
The underlying accounts are still available, but the “Keogh” name is legacy. Financial sources attribute the end of separate Keogh tax treatment to EGTRRA in 2001, and current IRS guidance, including Publication 560 (2025), simply calls these qualified plans or H.R. 10 plans. Most self-employed savers now open a SEP-IRA or Solo 401(k) for the same benefit with less paperwork (Source: IRS Publication 560, 2025).
What is the difference between a Keogh plan and a SEP IRA?
Both let self-employed owners contribute up to the lesser of 25% of compensation or $72,000 in 2026, but a SEP-IRA is simpler and has no defined-benefit option. A Keogh can be structured as a defined-benefit plan funding toward a $290,000 annual benefit for 2026, giving older high earners more capacity, at the cost of an actuary and possible Form 5500-EZ filing once assets exceed $250,000 (Source: IRS Notice 2025-67; IRS, 2025 Instructions for Form 5500-EZ).
How much can I contribute to a Keogh plan?
For 2026, a defined-contribution Keogh is capped at the lesser of 25% of compensation or $72,000. A self-employed owner applies a reduced rate, so a 25% plan rate equals 20% of net self-employment earnings. A defined-benefit Keogh instead funds toward an annual benefit of up to $290,000, with the yearly deposit set by an actuary (Source: IRS Notice 2025-67).
