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How does the Secure 2.0 Act affect 401Ks? In this episode, Matt Ruttenberg discusses the Secure 2.0 Act and how it can significantly affect tax credits for business owners. The Secure 2.0 Act is a piece of legislation that aims to improve retirement security for Americans.

The Secure 2.0 Act offers three main tax credits for businesses that offer retirement plans, including an administration tax credit of $250 per non-highly compensated participant up to 100% of administration fees, and an auto-enroll credit of $500 for the first three years of a plan starting in 2023.

The tax credits are only applicable to new plans, and there is still some clarification needed around certain details. Matt highlights various changes and tax credits for retirement plans that will be implemented in 2023. The contribution tax credit is the biggest and most significant tax credit, providing up to $1, 000 per participant who earns $100, 000 or less per year. This credit covers a new tax credit for small businesses that offer retirement plans.

Tune in now as Matt explains how The Secure 2.0 Act affects 401Ks and its impact on retirement planning! 

[00:01] How The Secure 2.0 Act Affect 401Ks

• Mike welcomes Matt Rutenberg from Life Inc. Retirement Services
• How does the Secure 2.0 Act affect 401Ks?
• Huge tax credits for business owners, up to $250 per participant for administration fees
• An auto-enrollment tax credit of $500 for the first three years of new plans starting in 2023

[03:37] Tax Credits Available For Small Business Retirement Plans

• New releases for retirement plans in 2023, 2024, and 2025
• Opt-in plans implemented before 2023 are not eligible for tax credits
• Administrative and auto-enroll changes for new plans in 2023
• Simple IRAs eligible for administration tax credits
• Retirement plans can be a selling point to attract and retain employees 

[10:46] Closing Segment

• Matt reminds listeners that the deadline for employee contribution to solo 401Ks is pushed back for the first year of the plan!
• Final Words

Key Quotes

“It's a clear goal here. They need people to save, they want people to save for retirement on their own, and these tax credits are helping to get the ball moving and to get the contributions going.” – Matt Ruttenberg

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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