Many states are implementing state-sponsored retirement savings programs to promote retirement savings and tackle the looming retirement crisis. Maryland is no exception and has introduced the MarylandSaves Program, a program geared toward small to medium-sized businesses and designed to offer retirement savings options to employees who do not have access to a retirement plan through their employers.

The MarylandSaves Program uses individual retirement accounts (IRAs) for employee retirement savings. Employers who elect into this program would facilitate employee contributions to IRAs through automatic payroll deductions. Contributions are deducted from employees’ paychecks and deposited into their IRA accounts. The accounts are portable, meaning employees can retain their accounts even if they change jobs.

One of the key advantages of the MarylandSaves Program for employers is the minimal administrative burden. Employers are not responsible for managing or investing in IRAs and do not contribute to the accounts. They simply facilitate payroll deductions and transmit employee contributions to the program.  If an employer participates in the program, employees can opt out if they wish, but they will be automatically enrolled otherwise.

Maryland has incentivized employers to participate in MarylandSaves or provide another type of retirement plan for their employees.  If a business enrolls in MarylandSaves, or if they offer another retirement plan to their employees, Maryland State Department of Assessments and Taxation will waive their $300 annual report fee.  If the business already offers a retirement plan, they must file a certification with MarylandSaves.  The certification is only good for one year, so this will need to be done annually.  To qualify for the 2024 annual report fee exemption, a business must file the certification online at MarylandSaves.org by December 1, 2023.

As with any retirement program, there are many rules and restrictions so you should consult with your attorney or tax professional before enrolling your business.  If you are a business that already has a retirement plan in place, we encourage you to file the certification before December 1, 2023 to have your $300 annual report fee waived. If you have any questions or want to learn more about the MarylandSaves program, please contact a Snyder Cohn team member or visit MarylandSaves.org.

 

by: Billy Litz