Small Business 401(k) Tax Credit Calculator

Estimate your Tax Credit for Starting a 401(k) Plan

SECURE 2.0 significantly enhanced the tax credits available to eligible small businesses that start a new plan, add an auto-enroll feature, or contributions made by employers. Use our free calculator to estimate your credits.

How many employees do you have?

Include business owner(s)

Tax credits are limited to 100 or less employees

How many of the employees are HCEs?

You cannot have more HCEs than employees

Will you fund an employer contribution?

Will your plan offer automatic enrollment?

Employees who will make over $100,000

Include business owner(s) and HCEs

Must be less than the number of total employees.

Estimated Annual Contribution

Year 1

Year 2

Year 3

Year 4

Year 5

401(k) Plan Cost

$2,000

$1,500

Employee Fiduciary Fee

$1,500

One-Time Startup Fee

$500

Employer Contribution

Tax Credits

$3,750

Startup Credit

$3,750

Auto Enrollment Credit

$500

Employer Contribution Credit

Cost After Credits

$1,500

401(k) Plan Cost

Tax Credits

$500

Total Estimated Savings:

$5,000

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Frequently Asked Questions

Have questions about SECURE 2.0 401(k) Tax Credits? Check out our FAQ.

What is the Startup Tax Credit?

Created in SECURE and enhanced in SECURE 2.0, an eligible employer may claim up to 100% of its qualified startup costs for adopting and maintaining a new 401(k) plan.

What is the Employer Contribution Tax Credit?

An eligible business may receive a tax credit for employer contributions provided by small businesses over the first few years of the 401(k) plan. The maximum limit is $1,000 per eligible employee per year. An eligible employee is paid no more than $100,000 a year (adjusted for inflation). The exact tax credit depends upon the number of employees and the number of years since the plan's startup.

What is the Auto-Enrollment Tax Credit?

Small businesses are eligible for a $500 tax credit by adding an automatic enrollment feature to a new or existing 401(k) plan. To be eligible, the auto-enrollment feature must meet Eligible Automatic Contribution Arrangement (EACA) requirements.

Who is eligible to receive the tax credits?

To be eligible, the business must meet 3 requirements:

Have 100 or fewer employees who were paid at least $5,000 in compensation by you in the preceding year;
Cover at least one non-HCE with your retirement plan; and
In the 3 tax years before the first year you’re eligible for the credit, your employees weren’t substantially the same employees who received contributions or accrued benefits in another retirement plan sponsored by you, a member of a controlled group that includes you, or a predecessor of either.

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