Your state made you offer a retirement plan. It did not tell you the federal government pays for one.

Three credits, and they stack.

Section 45E of the Internal Revenue Code, expanded by SECURE 2.0, pays employers with 100 or fewer employees to start a plan. There are three separate pieces and most employers are eligible for all three at once.

• CREDIT ONE
  Plan startup costs
  100%
  of what the plan costs you

  Covers the cost of starting the plan, up to $250 for each eligible employee who is not highly compensated, capped at $5,000 a year, for three years. Because it is capped at your actual cost, a flat-fee plan is usually covered outright.

  26 USC 45E
• CREDIT TWO
  Employer contributions
  $1,000
  per employee, per year

  For each employee earning under $105,000, on what you actually contribute. 100% of it in years one and two, then 75%, 50% and 25% in years three, four and five. This is the larger of the two numbers for most employers.

  26 USC 45E(f)
• CREDIT THREE
  Automatic enrollment
  $500
  a year for three years

  A flat credit for adding an eligible automatic contribution arrangement to the plan. It stacks on top of the other two, and turning the feature on is a setup decision, not an ongoing cost.

  26 USC 45T

Four documents, $499, flat.

Built from a ten-question intake and reviewed by a person before it reaches you. Two of the four are for your accountant. The other two are yours: a plan to sign, and a shortlist to choose from.

• 01
  Form 8881 worksheet

  Your numbers, laid out line by line against Form 8881 (Rev. December 2025), with a five-year schedule and every source cited on its own tab.

• 02
  CPA cover memo

  One page to hand your accountant: what is enclosed, what the numbers are, and the three points we ask them to confirm before filing.

• 03
  Section 127 plan

  A written educational assistance plan, $5,250 a year for tuition or student loan payments, made permanent and indexed after 2026 under P.L. 119-21.

• 04
  Provider shortlist

  Three flat-fee providers with published pricing, the state exemption step once your plan is live, and the two decisions to make before you sign anything.

The questions your accountant will ask.

• We already registered with our state auto-IRA. Does that disqualify us?

  We read it as no. Section 45E(c)(2) disqualifies an employer that maintained a qualified employer plan under section 4972(d) in the prior three years, and that definition lists 401(a), 403(a), SEP and SIMPLE plans. A state auto-IRA is a payroll-deduction Roth IRA, which is not on that list. This is the single most important question in the packet, so we put it in front of your CPA in writing rather than burying it.

• Who actually files this?

  Your CPA, on their own review. We are not a return preparer, not a fiduciary, and not a plan seller. The packet is information prepared from your answers and from public law, and it says so on the cover.

• What does it cost?

  The Federal Money Check is free. The packet is $499, flat, paid by the employer. If you are a CPA, it is free, prepared under your name, for your client. We never take a percentage of a credit or a reimbursement, on any product, ever.

• Is the credit refundable?

  No. It is a nonrefundable general business credit, so it needs tax liability to land against. Unused amounts carry forward. For a pass-through, it flows to the owners. There is also no deduction for the portion of costs the credit covers, under section 45E(e)(2). All of this is stated in the worksheet.

• What if the business does not owe any federal income tax?

  Then the credit does not put money in your hand for that year. It reduces tax owed, and with none owed there is nothing for it to reduce, so the unused amount becomes a carryforward and waits for a year that has liability. Nothing is lost; the timing moves. If the business is an S corporation, a partnership, a sole proprietorship or an LLC taxed as a pass-through, the company does not pay federal income tax itself: the credit flows through to the owners, so the question is whether they owe rather than whether the company does. The free check asks how the business is taxed and whether it owed federal income tax last year, which is how we tell you which of these you are in before you spend anything.

• Do you get paid by the plan providers?

  Not today. Partner programs exist in this market and terms are unpublished. If we ever take anything from a provider, it will be disclosed on the provider page before you see a shortlist.

• What does sponsoring a plan actually put on us?

  More than the state program does, and you should weigh it. Running your own 401(k) makes you the plan sponsor, which brings fiduciary duty, an annual Form 5500, and nondiscrimination testing. The state auto-IRA carries none of that, which is the one real thing it has going for it. Providers sell 3(16) fiduciary services that take most of the administration off you, and the packet says which of them do. For some employers the burden is still the right reason to stay where they are, and we would rather say that than sell you a plan you will resent.

• What if we do not qualify?

  Then the check tells you that and costs you nothing. The screen is 100 or fewer employees who earned at least $5,000 last year, and no 401(a), 403(a), SEP or SIMPLE plan in the prior three years.