{"id":54,"date":"2021-03-12T19:17:13","date_gmt":"2021-03-12T19:17:13","guid":{"rendered":"http:\/\/eplapprw11.paychex.com\/blogtest\/?post_type=article&p=54"},"modified":"2023-12-05T15:55:56","modified_gmt":"2023-12-05T15:55:56","slug":"leverage-the-secure-act-to-bring-value-to-clients","status":"publish","type":"article","link":"https:\/\/secure.eplanservices401k.com\/blog\/article\/leverage-the-secure-act-to-bring-value-to-clients\/","title":{"rendered":"Leverage the SECURE Act to Bring Value to Clients"},"content":{"rendered":"
Employers can earn tax credits by setting up a retirement plan<\/h1>\n
The SECURE Act provides a significant opportunity to enhance your consultations with clients, whose businesses have major incentives to establish a retirement plan:<\/p>\n
\n
Increased tax credits for plans started in 2020, subject to eligibility<\/li>\n
A benefit that can help recruit and retain top talent<\/li>\n
Safe harbor provision<\/li>\n
Lower tax liability<\/li>\n<\/ul>\n
<\/p>\n
Clients will have questions. Be prepared to discuss the details:<\/h2>\n
\n
Up to $5,000 in tax credit<\/strong> each year for three years<\/li>\n
A $500 annual credit\u00a0<\/strong>for businesses that establish a retirement plan with automatic enrollment<\/li>\n
Increase in maximum annual tax credit for pension plan start-up cost<\/h2>\n
<\/figure><\/p>\n
<\/figure><\/p>\n
FAQ – Tips to Help Financial Advisors Leverage Rules of the SECURE Act<\/h1>\n
<\/p>\n
Which businesses are eligible for potential tax credits?<\/h3>\n
Employers with fewer than 100 employees who received at least $5,000 in compensation the preceding year are eligible for a tax credit if they start a retirement plan.<\/p>\n
<\/p>\n
What is the tax credit to start a retirement plan?<\/h3>\n
The minimum is $500 and the maximum is $5,000 per year for three years, depending on the size of the employer. However, if expenses such as start-up costs and administration costs are used as deductions the they aren’t eligible for the tax credit.<\/p>\n
<\/p>\n
Is there additional credit available?<\/h3>\n
A new $500 tax credit is available for small employers (100 or fewer employees who received at least $5,000 in compensation the previous year) when they include eligible automatic enrollment features in the plan startup. This is good for three years.<\/p>\n
<\/p>\n
When do your clients need to set up a plan by to get the credit?<\/h3>\n
Businesses will have until their tax-filing deadline, rather than the last day of the tax year (Dec. 31), to establish a profit-sharing plan and get the credit, which means they can reduce their taxes for the previous filing year.<\/p>\n
<\/p>\n
What other benefits are available when clients establish a plan?<\/h3>\n
It is easier for clients to transition their plan to safe harbor plan and enjoy the benefit of an automatic pass on non-discrimination testing. There are certain provisions they must meet.<\/p>\n
<\/p>\n
What are the different plans available to choose from?<\/h3>\n
Your clients will have choices based on their needs, including multiple employer plans (MEP) or pooled employer plans (PEP).<\/p>\n
Under a PEP, two or more unrelated employers can join a plan and must have a pooled plan provider (PPP), whereas in a MEP the participating employers must have a common interest or function. This doesn\u2019t go into effect until 2021.<\/p>\n
More guidance is needed from the federal government on the rules and compliance regulations, and ePlan Services will track this and provide details when available.<\/p>\n
<\/p>\n
\n
This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.<\/em><\/p>\n<\/div>\n","protected":false},"featured_media":46,"template":"","categories":[19],"tags":[],"class_list":["post-54","article","type-article","status-publish","has-post-thumbnail","hentry","category-for-businesses"],"acf":[],"yoast_head":"\nLeverage the SECURE Act to Bring Value to Clients - 401(k) Blog<\/title>\n<meta name=\"description\" content=\"The SECURE Act provides an opportunity to enhance your consultations with clients, whose businesses have major incentives to establish a retirement plan.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/secure.eplanservices401k.com\/blog\/article\/leverage-the-secure-act-to-bring-value-to-clients\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Leverage the SECURE Act to Bring Value to Clients - 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