{"id":743,"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":"2025-10-02T18:25:51","modified_gmt":"2025-10-02T18:25:51","slug":"leverage-the-secure-act-to-bring-value-to-clients","status":"publish","type":"article","link":"https:\/\/secure.eplanservices401k.com\/marketing\/article\/leverage-the-secure-act-to-bring-value-to-clients\/","title":{"rendered":"Leverage the SECURE Act to Bring Value to Clients"},"content":{"rendered":"\n
Employers can earn tax credits by setting up a retirement plan<\/h2>\n\n\n\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\n\n
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Increased tax credits for plans started in 2020, subject to eligibility<\/li>\n\n\n\n
A benefit that can help recruit and retain top talent<\/li>\n\n\n\n
Safe harbor provision<\/li>\n\n\n\n
Lower tax liability<\/li>\n<\/ul>\n\n\n\n
<\/p>\n\n\n\n
Clients will have questions. Be prepared to discuss the details:<\/h2>\n\n\n\n
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Up to $5,000 in tax credit<\/strong> each year for three years<\/li>\n\n\n\n
A $500 annual credit <\/strong>for businesses that establish a retirement plan with automatic enrollment<\/li>\n\n\n\n
Increase in maximum annual tax credit for pension plan start-up cost<\/h2>\n\n\n\n<\/figure><\/figure>\n\n\n\n
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FAQ – Tips to Help Financial Advisors Leverage Rules of the SECURE Act<\/h2>\n\n\n\n
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Which businesses are eligible for potential tax credits?<\/h2>\n\n\n\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\n\n\n
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What is the tax credit to start a retirement plan?<\/h2>\n\n\n\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\n\n\n
<\/p>\n\n\n\n
Is there additional credit available?<\/h2>\n\n\n\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\n\n\n
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When do your clients need to set up a plan by to get the credit?<\/h2>\n\n\n\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\n\n\n
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What other benefits are available when clients establish a plan?<\/h2>\n\n\n\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\n\n\n
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What are the different plans available to choose from?<\/h2>\n\n\n\n
Your clients will have choices based on their needs, including multiple employer plans (MEP) or pooled employer plans (PEP).<\/p>\n\n\n\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\n\n\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\n\n\n\n
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