Understanding the SECURE Act 2.0
SECURE Act 2.0 is a legislation designed to enhance retirement security amid the changing landscape of retirement savings in the United States. One of the key components of the act is to encourage employer participation in retirement planning.
This legislation incentivizes small businesses to offer retirement plans to their employees by providing tax benefits and simplifying administrative requirements. By doing so, it aims to expand retirement savings opportunities and ensure more workers have access to employer-sponsored retirement plans.
Set up a competitive 401k plan and earn tax credits for up to 100% of your start-up and admin costs for the first three years.
Ways to Earn Tax Credits
The SECURE Act 2.0 aims to incentivize and facilitate small business employers’ participation in retirement planning for their employees. There are a variety of ways to take advantage of these tax credits while offering a competitive benefit and supporting your employees’ financial future.
1. Establish a Retirement Savings Program. Small businesses can claim up to 100% of the expenses associated with start-up and administrative costs for the first three years. The provisions call for tax credits up to the greater of $500 or $250 per eligible employee.
2. Offer an Employer Match. When you match employee contributions to their plan, their portfolio grows and so do your tax credits. Claim up to $1,000 per employee for your contributions made to their plans.
3. Collect Contributions Through Automatic Enrollment. New plans will be required to automatically enroll employees at a rate of at least 3% starting in 2025. Choosing a 401k plan that’s integrated with your payroll platform can streamline this process.
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