Start up Plan Credit: plan started in 2019

I understand that the new law increased the start-up plan credit for tax years beginning after 12/31/2019.  How would this work for a plan started in 2019.  Would their maximum credit be 500 on their 2019 tax return, but then 5,000 in the next two years?  Or do they stick with the 500 credit for all three years.  

I know of at least one accountant who thinks it applies to plans already in existence, as in your example.  I don't see anything to contradict that.

32 minutes ago, Bird said:

I know of at least one accountant who thinks it applies to plans already in existence, as in your example.  I don't see anything to contradict that.

Agreed.  The only thing that changed were the limits.  Those changes are effective for taxable years beginning after December 31, 2019.  Assuming its a calendar year plan and otherwise eligible, limit is $500 in 2019 and $5,000 in 2020.

See § 45E

7 hours ago, K2 said:

I understand that the new law increased the start-up plan credit for tax years beginning after 12/31/2019.  How would this work for a plan started in 2019.  Would their maximum credit be 500 on their 2019 tax return, but then 5,000 in the next two years?  Or do they stick with the 500 credit for all three years.  

Your first answer is the correct one. 

So, on a related note: suppose an eligible employer put in an automatic contribution arrangement in 2019. Can it claim the new credit for 2020 and 2021? Not at all clear to me that the arrangement has to be newly implemented after 2019.

I would think the credit for adding an automatic contribution arrangement could also apply for 2020 and 2021 if the arrangement were added in 2019.  The language of the Act states that "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" and the effective date is "taxable years beginning after December 31, 2019."  There is nothing that indicates that the arrangement had to be implemented after 12/31/19.  So I don't see anything that would preclude an employer from getting the credit even if the arrangement were implemented prior to 2020.  I would think if the arrangement were implemented in 2018, then the 3-year period runs for 2018, 2019 and 2020 and so the credit will be available for 2020.