It’s no secret that the biggest challenge our business owner clients face today is attracting and retaining employees. All joking aside, the government is here to help under the recent legislation known as SECURE 2.0. The law is designed to:
- encourage retirement savings
- lower administrative costs for employers
As our Geyer Law small business owner clients start 401(k) or 403(b) plans, they can now qualify for two kinds of tax credits:
- a tax credit up to $1,000 for the amount they contribute on each employee’s behalf.
- a tax credit for 100% of the administrative costs for setting up the plan (up to $5,000 for the first three years of the plan)
Meanwhile, employees who contribute to the 401(k) will now qualify for a credit of 50% of their contribution, up to $1,500. An exciting addition to the 2.0 version of SECURE is, that beginning in 2025, part-time employees will be able to participate in employer retirement plans.
Even with all these incentives, it may be challenging for small business owners to start and run a plan. SECURE 2.0 provides the same tax credits for small businesses that join multiple-employer plans.
In addition to all these incentives for small business owners to offer retirement plans for employees, a provision of SECURE 2.0 allows small businesses to match student loan payments with pretax contributions.
SECURE 2.0 is truly designed to help business owners help themselves and their employees save for retirement.
– by Ronnie of the Rebecca W. Geyer & Associates blog team