Key Takeaways
- The SECURE Act 2.0 provides significant tax credits for startup plan costs—for both administration and contribution costs.
- The credits are fully available for employers with 50 or fewer employees and partially available up to 100 employees.
- This provision is effective now, that is, it is effective for tax years beginning after December 31, 2022 (in 2023 for calendar year taxpayers).
The President signed the Consolidated Appropriations Act, which included SECURE Act 2.0, on December 29, 2022.
SECURE Act 2.0 has over 90 provisions, some major and some minor; some mandatory and some optional; some retroactively effective and some that won’t be effective for years to come. One difference between the SECURE Act 2.0 and previous retirement plan laws is that so many of 2.0’s provisions are optional…that is, plan sponsors are not required to adopt the provisions, but can if they decide that the change will help their plans and participants. This series discusses the provisions that are likely to be the most impactful, either as options or as required changes.
This article and the next one discusses the “optional” provisions that provide significant tax credits for startup plans for small employers. The Senate Finance Committee’s summary of the provision explains:
