As has become usual practice, Congress passed some meaningful tax legislation as it recessed for the holidays.
In one of the new meaningful laws, enacted on December 20, 2019, you will find the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).
The SECURE Act made many changes to how you save money for your retirement, how you use your money in retirement, and how you can better use your Section 529 plans. Each week, I present one of the eight game changers of the SECURE Act.
In week one, Congress gives small employers a tax credit for offering employees a retirement plan. If your business has a 401(k) plan or a SIMPLE (Savings Incentive Match Plan for Employees) plan that covers 100 or fewer employees, and it implements an automatic contribution arrangement for employees, either you or it qualifies for a $500 tax credit each year for three years, beginning with the first year of such automatic contribution.
This change is effective for tax years beginning after December 31, 2019.
Tax tip. This credit can apply to both newly created and existing retirement plans.
Next Week: IRA Contributions for Graduate and Postdoctoral Students