Learning

Get Your Share of SECURE ACT 2.0 Tax Credits

As of tax year 2023, SECURE Act 2.0 provides generous tax credits to small companies who start qualified retirement plans.

Your company may qualify for three multi-year credits for:

1

Employer contributions made on behalf of participants

Tax Credit Available: Up to $1,000 per eligible employee phased down over 5 years

2

Plan startup and annual plan costs

Tax Credit Available: The greater of $500 or $250 per plan eligible employee to a max of $5,000 per year for 3 years

3

Including an auto‑enrollment provision

Tax Credit Available: $500 per year for 3 years

Examples

Total Employees

Owners/HCE*

Eligible and earn <$100,000

Eligible and earn $100,000- $149,000

Not eligible

Plan Tax Credit of $250 per eligible NHCE

$250 x 11
= $2,750

$250 x 13
= $3,250

$250 x 40
= $10,000
capped at 50% or $5,000

Contribution Tax Credit up to $1,000 per Employee

Up to $10,000

Up to $21,000

Auto Enroll

Yes = $500

Total Potential Credits Per Year

Plan	$2,750
Contribution	up to $10,000
Auto Enroll	$500
Total	up to $13,250

Plan	$3,250
Contribution	up to $10,000
Auto Enroll	$500
Total	up to $13,250

Plan	½ up to $10,000
Contribution	up to $21,000
Auto Enroll	$500
Total	up to $31,500

*HCE = Highly Compensated Employee; NHCE = Non-Highly Compensated Employee

Calculate Your Tax Credits

Requirements to qualify for SECURE Act 2.0

Startup Tax Credits

Your company did not offer a plan covering substantially the same employees during the previous three tax years, and
Your company had no more than 100 employees who received compensation of $5,000 or more in the preceding year

SECURE Act 2.0 tax credit for

Employer Contributions

The tax credit is a decreasing percentage of the amount contributed by the employer for each employee earning no more than $100,000 per year, up to $1,000 annually per employee, over the plan’s first five years.

SECURE Act 2.0 tax credit for

Plan Costs

The tax credit for plan costs reduces the federal tax liability a small business may owe during each of the first three years of its first-ever retirement plan.

If your company has 50 or fewer employees, the credit covers up to 100% of ordinary and necessary out-of-pocket plan costs*.
If your company has 51 to 100 employees, the credit covers 50% of these costs*.

The annual plan cost tax credit is capped at $5,000. Your actual credit is calculated as the greater of $500 or $250 X the number of plan-eligible, non-highly compensated employees (NHCEs) To qualify for this credit, a plan must have at least one participant who is a NHCE.

IMPORTANT NOTE: The information provided here is merely an educational illustration. Please consult a tax professional and your financial advisor for guidance about available tax credits that may be available for your company’s unique situation.

Calculate Your Tax Credits

Request a Meeting

WELLthBuilder is presented by Strategic Retirement Partners (SRP), a leading national team of retirement plan-focused financial advisors.

Let’s talk about your company’s retirement plan needs.

Let’s Set Up a Meeting