SECURE 2.0 small employer tax credit calculator.
Get a preliminary estimate of the three main federal credits available to small employers that start a new retirement plan: the Section 45E startup-cost credit, the Section 45E employer-contribution credit added by SECURE 2.0, and the Section 45T auto-enrollment credit.
Illustrative estimates only. Results do not determine eligibility, legal compliance, tax treatment or required corrective action.
SECURE 2.0 credit automation demo
Explore a preliminary estimate for the Section 45E startup-cost credit, employer-contribution credit, and Section 45T auto-enrollment credit. Enter the number of employees and contributions that you have already determined may qualify.
Illustrative only. Confirm all statutory eligibility, wage, aggregation, tax-year, deduction and tax-liability rules with a qualified tax professional.
The math behind the result
Startup-cost credit (45E)
100% of qualified startup costs for employers with up to 50 employees, or 50% for 51 to 100 employees. The annual cap is the greater of $500 or the lesser of $250 per eligible non-highly compensated employee and $5,000. Available for the first three years.
Employer-contribution credit (45E)
Up to $1,000 per employee of qualifying employer contributions, at 100% in years 1 and 2, 75% in year 3, 50% in year 4 and 25% in year 5. For employers with 51 to 100 employees, the credit phases down by 2 percentage points for each employee above 50.
Auto-enrollment credit (45T)
$500 a year for up to three years when the plan adds an eligible automatic enrollment feature.
Employer size
The credits generally apply to employers with up to 100 employees who earned at least $5,000 in the preceding year; above that the calculator shows $0.
Good uses
- Showing a prospective plan sponsor what a new plan could cost after credits
- Comparing plan designs with and without auto-enrollment
- Preparing for a conversation with the employer's tax professional
What it does not do
- It does not test every eligibility rule, such as controlled-group aggregation or prior plan history
- The employer-contribution credit excludes contributions for employees above an inflation-adjusted wage threshold; enter only participants you have already determined qualify
- Credits are subject to tax liability and deduction rules; confirm with a qualified tax professional
Frequently asked questions
Who qualifies for the SECURE 2.0 startup credit?
Generally, employers with 100 or fewer employees who received at least $5,000 in compensation in the preceding year, who have not maintained a qualified plan for the same employees in the prior three years. Confirm the full rules with the IRS guidance or a tax professional.
Can an employer claim more than one credit?
Yes. The startup-cost credit, the employer-contribution credit and the auto-enrollment credit are separate and can apply together when each set of requirements is met.
Why does the contribution credit drop after year 2?
SECURE 2.0 phases it down over five years: 100%, 100%, 75%, 50% and 25% of the eligible amount, up to $1,000 per employee.
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