SECURE Act 2.0: The Tax Credits Your Business Qualifies For

The SECURE Act 2.0, signed into law in December 2022, created some of the most meaningful small business retirement incentives in years. Most owners haven't heard about them.

The Retirement Plan Startup Cost Credit covers up to 100% of the administrative costs of starting a new 401(k), SEP IRA, or SIMPLE IRA for up to three years. For businesses with fewer than 50 employees, this can mean the plan costs you almost nothing to launch.

There's also an Employer Contribution Credit for new plans: if you match employee contributions, you can receive a credit worth up to $1,000 per employee for the first year, phasing down over five years. That's real money back against what you're putting in.

Auto-enrollment is another area of credit. Businesses that adopt automatic enrollment into their retirement plans qualify for an additional $500 credit per year for three years.

These credits don't require a large, complex plan. A properly structured SIMPLE IRA for a 10-person company can generate meaningful tax credits while building a competitive benefit.

The window to capture these credits is the year the plan is established. If you've been thinking about setting up a retirement plan for your business, the financial case is stronger than it's ever been.