new plan credit for small employers clarification needed

Prior to SECURE 2.0 there was the 3-year credit of 50% of plan admin costs up to $5,000 for small employers.  I understand now that credit rate is 100%.  PLUS there is now a new credit of 100% or an employer contribution up to $1000 per employee (phased down after year 2.)

So a small employer starting a new plan gets both credits?  That seems to be what I am reading.  Is it really that good?  

These may help:

https://www.employeebenefitslawblog.com/money-thats-what-i-want-expanded-pension-plan-startup-cost-credit/

https://www.schneiderdowns.com/our-thoughts-on/secure-2-act-section-102-summary

https://www.thebenefitofbenefits.com/2023/01/secure-2-0-provisions-encouraging-employers-to-adopt-a-plan/

Let’s put some arithmetic on this:

Imagine an employer has exactly 50 employees (not counting any business owner), all with wages less than $100,000, none a military spouse, and all are participants under the individual-account retirement plan. In 2023, the employer created that new plan. (Assume all accounting, tax, plan, and limitation years are the calendar year.) For 2023, the employer provides and pays a nonelective contribution of $1,000 for each participant.

Is this portion of the tax credit $50,000?

Imagine this employer pays the plan’s recordkeeper a $5,000 startup fee.

Is this portion of the tax credit $5,000?

Is the total tax credit for 2023 $55,000?

Internal Revenue Code of 1986 (26 U.S.C.) § 45E Small Employer Pension Plan Startup Costs https://irc.bloombergtax.com/public/uscode/doc/irc/section_45e

Seems correct to me. Of course, the employer can't deduct the 50,000 contribution, so the ACTUAL net benefit won't be quite so high as 50,000. I'm sure some clever CPA's somewhere will do a chart of the "net" benefit at different brackets compared to the benefit from taking a deduction instead. Also, I have no idea if taking these tax credits will adversely affect other deductions/credits that might be available for other items/purposes. Again, that's a CPA issue.

Do the flow-throughs of the tax credit mean the employer’s owners pay the $50,000 contribution and the $5,000 startup fee with the US Treasury’s money?

Deduction or tax credit not both. That certainly takes the bloom off the rose.  Most of our clients are professional service companies - doctors/dentists, etc.  The deduction is likely more important than the credit.  Id' have to take that to their tax advisor.  And yes with the qualified business income deduction, change in carryback and carryforward rules.  It isn't as easy as it once was.