Payroll Briefs

Payroll Considerations from the SECURE 2.0 Act

April 14, 2023

As a follow-up to the Setting Every Community Up for Retirement Enhancement (SECURE) Act passed in 2019, Congress passed a SECURE 2.0 Act in December 2022, aimed to provide even more retirement options for American workers. The latest legislation includes a significant number of provisions impacting retirement plan providers and its employees. There are over 90 provisions in SECURE 2.0, below are three aspects that DM Payroll Solutions can help you with.

  • Student loan payments. Beginning in 2024, employers may make matching contributions under a 401(k) or 403(b) plan on employees’ qualified student loan payments to help them save while paying off debt. To help streamline this process for you, DM Payroll Solutions can deduct these from your payroll for you.
  • Optional Roth treatment of employer contributions. Effective immediately, employers may amend their plans to permit employees to elect that employer matching and non-elective contributions be made as Roth (after-tax) contributions, as long as they are 100% vested when contributed to the plan. Additional guidance is expected on this provision. Our team can help you set up these deductions directly through your payroll.
  • Small business tax credits. Currently, employers with fewer than 100 employees may be eligible for a three-year start-up tax credit of up to 50% of administrative costs, with an annual limit of $5,000. SECURE 2.0 increases this credit to 100% of qualified start-up costs for employers with up to 50 employees. An additional credit of up to $1,000 per employee for eligible employer contributions may apply to employers with up to 50 employees, but phases out from 51 to 100 employees. At DM Payroll Solutions, we work with providers who can implement these plans for your employees. Once the plan is set up, they work with you to ensure the tax credit is received.

At DM Payroll Solutions, we stay up-to-date on the latest laws and regulations to keep your company in compliance, so you don’t have to. Though many of the provisions found in the SECURE 2.0 Act will not be effective for a few years, offering a benefits plan to your employees can set you apart from the competition. With the available tax credits to offset start-up costs, there is no better time to get started.

With integrated payroll, benefits, recruiting and onboarding, our system creates a better experience to attract, hire, engage and retain talent. Streamline your benefits administration with access to end-to-end solutions providing you with better oversight of your company’s benefit plans. Easily enroll new hires, update plan choices, monitor employee eligibility and enrollment status, comply with COBRA administration, get real-time reporting and initiate automatic payroll deductions upon approval. Contact us today to learn more about our benefits administration solutions.