SECURE 2.0 Tax Credit Calculator for Eligible Employers1
The SECURE 2.0 Act of 2022 enhances the accessibility of retirement plans, such as the 401(k), for small businesses. Utilize this calculator to determine the potential tax credits that may be available to your clients or your company in the first tax year when sponsoring an eligible retirement plan. The startup costs credit and auto-enrollment credit may be extended for an additional two years, while the employer contribution credit may be available for up to four more years.
Please note: Businesses with more than 100 employees are generally not eligible for the credits.2
This information was approved for accuracy as of April 19, 2024, but is not updated for subsequent guidance or law.
Employees are those with at least $5,000 in compensation in the preceding calendar year.
This compensation threshold is generally FICA wages and is indexed.
For illustrative purposes, this sample assumes the employer contribution is same for everyone.
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This feature may be required for new plans beginning as early as January 1, 2025. DB plans enter "No". |
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Small Businesses with up to 50 employees qualify for 100% of the credit. Small Businesses with more than 50 employees qualify for 50% of the credit. Generally, businesses with more than 100 employees are not eligible for the credit. |
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Plan expenses include establishing and administering the plan and educating employees. |
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Lesser of $5,000 or number of NHCEs multiplied by $250 ($500 if only 1 NHCE). |
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Assumed contributions to non-highly compensated employees. |
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Applicable percentage of the employer contribution given to employees with $100,000 (indexed) or less in FICA wages, up to a maximum of $1,000 per employee. |
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$500 for the first three years in which a Small Business with up to 100 employees offers a EACA including a QACA that meets the EACA requirements (but not an ACA that is not an EACA). |
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