SECURE Act Archives - Broker-Dealer Regulation & Litigation Insights

Subject: SECURE Act

A New Opportunity for 529 Account Beneficiaries – Tax-Fee Rollovers to Roth IRAs

Beneficiaries of qualified tuition programs under Section 529 of the Internal Revenue Code (“529 accounts”) will have a new opportunity starting January 1, 2024. Under SECURE Act 2.0 (the “Act”), 529 account beneficiaries will be able to rollover funds from the 529 account into a Roth IRA without incurring tax or penalties providing certain requirements are met.

Broker-dealers and registered representatives (“advisors”) will want to know about this rule so as to advise families and students about the funding and related planning considerations for 529 accounts.

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Tax Credits for Starting Up Small Employer Plans: What You Need to Know

Key Takeaways:

Starting with tax years beginning after December 31, 2022, a small employer can take advantage of significant tax credits under SECURE Act 2.0 (the “Act”) for establishing a new retirement plan. Under the Act, the tax credits are available for plan administrative and contribution costs.

The full tax credit is available to employers with 50 or fewer employees and there is a partial credit available to employers with 51 to 100 employees. There are several additional conditions for eligibility as well.

Broker-dealers and registered representatives (“advisors”) will want to know about these credits in order to educate small businesses and assist them in establishing plans to take advantage of the credits.

The Credit for Plan Start-Up Costs

Eligible Small Employers

Advisors should educate small employers about the available tax credit for the administrative costs of setting up and operating an eligible employer plan for the first three years in which the plan is maintained. In order to qualify for the credit, the following conditions must be met:

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SECURE Act 2.0: Key Provisions Affecting Retirement Plans

Late last year, House Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ranking Member Kevin Brady (R-TX) introduced the Securing a Strong Retirement Act of 2020 (SECURE 2.0), a bipartisan legislative proposal that includes changes designed to encourage plan adoption, promote retirement savings, and fix certain plan administration problems.

As retirement income issues gain an expanding focus, we think it is important for broker-dealers, RIAs and their advisors to understand changes that could impact their clients. In this post, we comment on a number of the key provisions.
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