Auto Enrollment Tax Credit

[austin3515]

Is the Auto Enrollment Tax Credit ($500 per year for 3 years under SECURE Act) available to ALL EACA's, or just EACA's that cover ALL employees (i.e., an EACA that includes a sweep of existing eligible employees).

A lot of EACA's only apply to those who become newly eligible. 

[justanotheradmin]

I don't know the answer, but I would like to know the answer as well. We have a number of plans that want the tax credit, but only want the EACA to apply to new participants. They do not care about the extended correction period. 

[austin3515]

Well maybe someday someone will let us know!  Something tells me the answer is "the answer is not clear."

[Catch22PGM]

Everything that I have read only states it must be EACA (or QACA).  Since EACA is not required to cover all employees, and I don't see anything that adds that restriction for the tax credit, I can't find any reason the tax credit would be restricted:

SEC. 105. SMALL EMPLOYER AUTOMATIC ENROLLMENT CREDIT.

(a) In General.—Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

“SEC. 45T. AUTO-ENROLLMENT OPTION FOR RETIREMENT SAVINGS OPTIONS PROVIDED BY SMALL EMPLOYERS.

(b) Credit Period.—For purposes of subsection (a)—

(1) IN GENERAL.—The credit period with respect to any eligible employer is the 3-taxable-year period beginning with the first taxable year for which the employer includes an eligible automatic contribution arrangement (as defined in section 414(w)(3)) in a qualified employer plan (as defined in section 4972(d)) sponsored by the employer.

I want to piggy-back onto your question so hopefully someone will chime-in.  Is the Auto Enrollment Tax Credit available to a plan sponsor who has ACA in 2020 but amends to EACA or QACA for 2021?