Secure Act 2.0 Tax Credit Calculator

With the recent passing of Secure Act 2.0, new tax credits may be available to you, making a 401(k) plan even more affordable.

Let's see your potential savings!

If you start a qualified retirement plan with auto-enrollment, you may qualify to earn more than $150,000 in tax credits over a three-year period.

Do you currently have a 401(k) plan?

What year was it started?

If the plan is more than five years old, it may not be eligible for tax credits. But you may still be eligible for a $500 auto-enrollment credit!

How many employees (including owners) were paid more than $5k in W-2 wages last year??

If there are more than 100 employees, only the auto-enrollment credit may be applied.

How many of those employees will earn more than $100k this year??

Please enter number equal to or less than your total employee count.

How many of those employees are classified as owners (as defined by the IRS)? ?

Who will pay the employee fees??

Which plan type?

Plan Fee and Tax Credit Illustration
Year 1
Year 2
Year 3
Total

Total recordkeeping fees

   › Annual recordkeeping fees

   › Conversion fee ?

   › Employee fee (optional)?

Total tax credits up to

 › Start-up credit ?

 › Auto-enrollment credit ?

 › Matching contributions* ?

You're eligible for in tax credits from matching contributions over the plan's first three years!

Please note: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction. For further information, please visit the IRS website. The tax credits available to your company may change based upon the number of HCEs. Also, the definition of HCE may change based on IRS rules and guidance.

Auto-enroll: Annual credit of $500 applies to plans who add an automatic-enrollment provision to the 401(k) Plan. For purposes of this illustration, we are assuming the employer is opting into an auto-enroll plan.

Matching Contributions: For employer matching contributions, up to $1,000 per year in tax credits, per employee, for up to 50 employees. In Years 1 and 2 of a plan, the credit is 100%, decreasing to 75% and 50% in Years 3 and 4, respectively. Starting with the 51st employee, the credit is reduced by 2% for each additional employee. For example, the tax credit percentage for matching contributions for 99 employees is only 2%.

* Please note, this number does not take into account the total amount the employer would be contributing, just the possible tax credit they can receive. For example, if the average salary is $50,000 and there's a 3% match, that's a $1,500/yr contribution from the employer. If there's less than 50 employees, this tax credit would cover the first $1,000, leaving the employer with a $500 net contribution per employee.
Important Disclosures from J.P. Morgan

The calculator and information contained within the illustrator tool has been developed by Vestwell, Inc. and has not been verified for accuracy by JPMorgan Chase & Co.

JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction. This material was prepared by Vestwell Holdings Inc. and its accuracy has not been verified by J.P. Morgan Asset Management. The information is shown for illustrative purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Plan sponsors should reference JP Morgan Invest Holding 408(b)(2) services and fee disclosure notice for more complete information, which is available on the plan sponsor portal for your plan. Additional fee information is available for participants on your plan’s J.P. Morgan Everyday 401(k) website. Certain recordkeeping and related services for plans may be provided on behalf of JPMorgan Invest Holdings LLC (J.P. Morgan) or by Vestwell Holdings Inc.

Vestwell Holdings Inc. provides various fiduciary and non-fiduciary services on its proprietary recordkeeping platform to support tax-qualified retirement plans. To learn more about Vestwell Holdings Inc. and its services, please visit https://www.vestwell.com.

J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide.

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