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Tax credit for small business 401(k)
originally posted: 11/22/2006
reposted: 2/18/2011 This post has not been recently
reviewed or revised by the author and may be out of date. If in doubt,
please send a new question or ask for an update.
Q:
How do I qualify for a tax credit for setting up a 401(k) plan?
A:
A tax credit of half of the cost of setting up and operating a retirement plan, up to $500 per year, is available to the business for the portion that is attributable to setting up a retirement savings plan. The credit is automatic; you do not need to take any special action but it makes sense to discuss this with the Plan Adviser at the time of set-up in order to maximize your tax savings.
Additionally, lower income employees qualify for a separate individual tax credit for participating in the plan.
Summary
More resources:
FreedomBenefits.org small business retirement plans
