It has been quite some time since Maryland’s general assembly passed MarylandSaves in 2016. After much delay, Maryland finally put its retirement vehicle into motion on September 15, 2022, in the form of a Roth IRA account.
Now that the program has been in full effect for over a year, applicable Maryland businesses must file for the annual exemption by December 31, 2023. Here are the details business owners need to know.
Filing for the Exemption
The clearest benefit this program provides to business owners is the exemption from the $300 annual filing fee Maryland businesses have paid for many years. Maryland provides exemptions for employers who sign up for MarylandSaves or provide their employees with a different retirement solution, such as a 401(k) or a SIMPLE IRA plan.
Employers can file for the annual exemption here. If you have not signed up for the waiver, Maryland extended the deadline to December 31, 2023 to claim an exemption for the 2024 Annual Report.
Please note: If you claim an exemption through an alternative retirement plan, you must file annually to claim the exemption. If you provide a MarylandSaves retirement plan, your exemption will remain intact for as long as you leverage the plan.
Is Your Business Required to File?
The bill covers almost all business owners who have employees. Even if your organization is classified as a nonprofit, you must enroll in MarylandSaves or an alternative program if your business meets all the following criteria:
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Registered to conduct business in the state of Maryland
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You have at least one employee that earns Maryland W-2 wages
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The organization has been in operation for at least two years
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Your business does not currently offer an employer-sponsored retirement plan to employees
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You pay your employees through an automated payroll system
The program is free to employers, and all administrative costs tied to the program are paid through fund expenses. As the employer, you do not have any fiduciary responsibility with the MarylandSaves program, and there is no employer match involved.
So, if you haven’t done so already, sign up for MarylandSaves as soon as possible to avoid any penalties from the state and reap the savings from the program.
Implications for Employees
If you have employees who do not wish to participate in the MarylandSaves program, they may opt-out at any time. But they will be automatically enrolled when your company kickstarts the program.
One particular benefit for employees who utilize the MarylandSaves program is the WorkLife Account provided through the program. The account allows the employee to access $1,000 from their Roth IRA retirement contributions to use as an emergency fund to assist with unexpected expenses.
Need Help?
If you have any questions or concerns regarding the MarylandSaves program, please contact us here or call 800.899.4623. You can also explore the program’s website.
