Footnote1

Under the SECURE Act, tax credits may be available to help you offset your first three years of plan startup costs in an amount equal to 50% of qualified startup costs paid or incurred, but limited to the greater of (1) $500 or (2) the lesser of (a) $250 for each non-highly compensated employee who is eligible to participate in the plan or (b) $5,000. In general, "qualified startup costs" are ordinary and necessary expenses of an eligible employer that are paid or incurred in connection with the establishment or administration of an eligible employer plan, or the retirement-related education of employees with respect to plan if the plan has at least one participant who is not a highly compensated employee. Employers should be advised to consult their tax advisors concerning eligibility for the credit. 

 

Secure 2.0, which was contained in Consolidated Appropriations Act, 2023, P.L. 117-328, enacted December 29, 2022, extended the $5,000 per year tax credit for the first three years to 100% of plan administrative expenses for businesses with 50 or fewer employees.

Footnote2

Under Internal Revenue Code Section 45E(f), businesses with 50 or fewer employees may qualify for tax credits for employer contributions for eligible employees (i.e. those who make $100,000 or less). In the first two years of the plan, the credit is 100% of the employer contribution capped at $1,000 per eligible employee, in year three of the plan it is 75% of the employer contribution capped at $1,000 per eligible employee, in year four of the plan it is 50% of the employer contribution capped at $1,000 per eligible employee and in year five of the plan, it is 25% of the employer contribution capped at $1,000 per eligible employee. This credit is phased out for employers with 51–100 employees.

Footnote3

A one-time $500 start-up fee for a new 401(k) is required. For existing 401(k) plans converting to Everyday 401(k), there is a $750 conversion fee instead.

Footnote4

The monthly participant fee is typically paid by the participant. The employer may choose to cover this.

 

 

IMPORTANT INFORMATION

INVESTMENT AND INSURANCE PRODUCTS ARE:

  • NOT FDIC INSURED
  • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
  • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES
  • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

 

Certain recordkeeping and related services for plans may be provided on behalf of JPMorgan Invest Holdings LLC (J.P. Morgan) by Vestwell Holdings, Inc. Vestwell Holdings, Inc. provides various fiduciary and non-fiduciary services on its proprietary recordkeeping platform to support tax-qualified retirement plans. To learn more about Vestwell Holdings, Inc. and its services, please visit vestwell.com, Opens overlay.

 

J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide.

 

Telephone calls and electronic communications may be monitored and/or recorded. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our privacy policies at jpmorgan.com/privacy.

 

If you are a person with a disability and need additional support in viewing the material, please call us at 1-800-343-1113 for assistance.

 

Everyday 401(k) by J.P. Morgan is not an offering of JPMorgan Chase Bank, NA; clients will be directed to J.P. Morgan Asset Management, an affiliate.

 

This material is for Informational/Educational Purposes Only: The opinions expressed in this material may differ from the official policy or position of (or endorsement by) JPMorgan Chase & Co. or its affiliates. Opinions and strategies described may not be appropriate for everyone, and are not intended as specific advice/recommendations for any individual or business. The material is not intended to provide legal, tax, or financial advice or to indicate the availability or suitability of any JPMorgan Chase Bank, N.A. product or service. You should carefully consider your needs and objectives before making any decisions, and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. JPMorgan Chase & Co. and its affiliates are not responsible for, and do not provide or endorse third party products, services or other content.

 

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