A few weeks ago we mentioned the recently enacted tax bill called the Securing a Strong Retirement Act 2022, otherwise known as “SECURE 2.0 Act.” or “SECURE Act 2.0”. It addresses many beneficial changes as we all plan for our retirements.
One key area is the significant expansion of startup credits that could make 2023 the time to set up a retirement plan (401k plan, SIMPLE or SEP IRA, etc.). A retirement plan startup cost tax credit allows eligible employers to claim a tax credit of up to $5,000 for three years for the costs of setting up a SEP or SIMPLE IRA or qualified plan. SECURE 2.0 Act strengthened the existing startup plan tax credit by removing its percentage limitations for plans with no more than 50 employees and creating a new credit that reimburses small business for up to $1,000 of employer contributions paid on behalf of modest earners. This new tax credit starts at 100% of employer contributions for certain employees, and phases down over the first five years of plan adoption. Learn more here.
If you’ve thought about starting a retirement plan, now could be the perfect time. Reach out to us for your complementary meeting to review your options and get the advice you need to get started.
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