The solo 401(k) test that keeps Virginia's RetirePath out of your payroll

The deadline is a payroll decision

You open the payroll file and see a new line: retirement. For a Virginia bootstrapped team, RetirePath Virginia is a state-facilitated program with a registration deadline.

The program began covering smaller employers on July 1, 2026. The employer size test now starts at five employees, with part-time workers included. A team with five to nine eligible employees has a final registration date of October 30, 2026.

That changes the usual small-business retirement question: you are choosing between a qualified plan and a state-run payroll deduction.

The rule is easy to miss because it is tied to a registration deadline. As a bootstrapper, you read the bank balance daily. Slower growth is a choice; a payroll surprise is not a choice. The rule can turn a quiet month into a budget problem. The safer move is to treat the deadline as a budget line, not a legal footnote.

Headcount is the first cash test

Start with the people on payroll. Eligible employees are 18 or older and receive Virginia wages. The old 30-hours-per-week rule no longer applies. Part-time workers count toward the threshold.

For a five-person shop, a part-time worker can put you in scope. For a nine-person team, the deadline is the same.

Pull the payroll register, not the org chart. The part-time person who works a few hours can change your answer. The age and wage test does the work.

Near the line, count again before you celebrate. A single added worker can move you from exempt to registered. Keep a simple count in the same place you keep payroll, so the number is visible when the registration date arrives.

A qualified plan can be the exemption

Sponsoring a qualified retirement plan is enough to meet the Virginia RetirePath obligation. For a bootstrapped founder, that often points to the plan you use to pay yourself. The plan's name does not settle it; whether the plan qualifies does.

Your own 401(k) can carry the exemption when it is a qualified plan. The plan you already run can do the work if it qualifies. Do not assume a plan is active just because it exists. Check that contributions are being made, that the paperwork is current, and that the plan is not a shell.

A dormant plan can look like coverage on paper. It can fail in the moment you need the exemption. For a bootstrapped team, the contribution should match the cash you can sustain. A contribution you cannot fund is a future burn problem. Keep the certification paperwork ready. If the plan qualifies, it can keep the state program out of your payroll.

The penalty is a line item

Miss the obligation, and the penalty becomes a recurring payroll exposure. For a five-person team, that is a cash line you should not ignore. RetirePath Virginia uses automatic payroll deductions to fund a Roth IRA that the worker owns. The worker keeps the account even if they move or change jobs. That is a real benefit for employees, but it is also a cash outflow from your payroll.

Before you choose the state program, price the deduction and the possible penalty. A qualified plan path needs the same pricing: administration and the contribution you can sustain. Put both options in the same spreadsheet. Model the deduction as a payroll cost, not a benefit perk. Model the penalty as a recurring liability.

When cash is tight, the state program may be the smaller surprise. An existing qualified plan may be the cheaper path. Talk to employees before you choose. The state program gives them a portable Roth IRA.

• Count every employee who is 18 or older and receives Virginia wages, including part-time workers.
• Confirm your plan is a qualified retirement plan.
• Sponsor a qualified retirement plan to satisfy the Virginia RetirePath requirement.
• For RetirePath, budget the payroll deduction and the possible penalty of up to $200 per eligible employee each year.

Run the check before the deadline. Then mark the payroll line you will actually fund.