The SECURE 2.0 Act was signed into law on December 29, 2022, and contains a number of provisions impacting employer retirement plans. As a family business owner, it is important to stay on top of changes in the law that may impact your business or your retirement plans.
Below are three SECURE 2.0 retirement plan changes that family business owners should be aware of.
- Tax credits for start-up costs. Beginning in 2023, businesses with 50 or fewer employees are eligible for a tax credit on up to 100% of retirement plan start-up costs. Businesses with 100 or fewer employees may also be eligible for a credit on a percentage of employer contributions.
- Automatic enrollment. Beginning in 2025, 401(k) plans will be required to automatically enroll eligible employees. However, there are exceptions for businesses with 10 or fewer employees and businesses in existence for less than 3 years.
- Part-time employee participation. Beginning in 2025, employers will be required to allow part-time employees to contribute to the employer’s retirement plan if they have 500 or more hours of service for two consecutive years.
Read more about the SECURE 2.0 Act and tax strategies for high-income individuals.
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