SECURE 2.0
TAX CREDITS.
Four federal tax credits can lower what an eligible small employer pays to start and run a retirement plan. Each one is set out below: what it may be worth, and who may qualify for it.
We design and administer the plan. We do not give tax or legal advice, and we never manage or sell the investments.
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FOUR CREDITS TO KNOW.
As the brief sets them outRetirement plan startup costs
- Potential benefit
- Up to$5,000per year, for up to 3 years
- Who may qualify
- Employers with 100 or fewer employees that meet IRS eligibility requirements and establish a new eligible retirement plan.
Employer contributions
- Potential benefit
- Up to$1,000per eligible employee
- Who may qualify
- Eligible small employers making qualifying matching or nonelective contributions to a defined contribution plan.
Automatic enrollment
- Potential benefit
- $500per year, for 3 years
- Who may qualify
- Eligible small employers that add an eligible automatic contribution arrangement to a new or existing plan.
Military spouse participation
- Potential benefit
- Up to$500per qualifying spouse, per year, for up to 3 years
- Who may qualify
- Eligible small employers whose defined contribution plan meets specific SECURE 2.0 requirements for military spouses.
This material is for general informational purposes only and is not tax or legal advice. Tax credits, eligibility, limits, phase-outs, and plan requirements depend on applicable law and the employer’s specific facts. Consult your tax, legal, and retirement plan professionals before claiming a credit.
THREE OF THE FOUR TURN ON HOW THE PLAN IS WRITTEN.
The startup credit asks for a new eligible plan. The other three follow features the plan itself has to carry: matching or nonelective contributions of the qualifying kind, an eligible automatic contribution arrangement, and the SECURE 2.0 requirements for military spouses.
Those are plan design decisions, for a new plan or an existing one, and they are the work we do: a plan written around your census, cash flow and goals, then run and kept compliant by the same people. Whether a credit applies to your organization is a question for your tax professional; whether the plan is built to carry it is one for us.
LET’S REVIEW YOUR PLAN.
A plan review may uncover opportunities to reduce the after-tax cost of your retirement plan. Contact us to discuss whether SECURE 2.0 tax credits may apply to your organization.
