According to ADP data, 60% of workers consider retirement plans a “must-have” benefit. As employers compete for workers in a historically tight talent market, small employers who add these benefits can help set themselves apart from other employers.
Under the enhanced tax credit incentive, firms with 100 or fewer employees can qualify for a three-year tax credit if they set up a 401(k) program for their employees. Eligible employers may be able to claim a tax credit of up to $5,000 annually, for three years, to cover 50% of out-of-pocket expenses to start or to maintain a 401(k) plan. If they add an automatic enrollment feature to the plan, they could qualify for an additional $500 for three years.
To help small businesses more easily obtain available tax credits for starting an employee retirement plan, ADP is now preparing tax credit packages to provide support. Based on qualification requirements, ADP’s tax credit package tells employers the amount they can expect to receive annually and explains how the credit was calculated, making it easy for an employer’s tax professional to file for the credit.
In addition to the new tax credit package service, ADP’s retirement plan solutions use data and technology to make retirement plans easy to manage. Seamlessly integrated platforms reduce potential compliance risk and save time and money on plan administration while a data-driven participant experience empowers employees to make better savings decisions.
