MarylandSaves is a state program that helps workers save for retirement if their employer does not offer a retirement plan. Employees are enrolled in a Roth IRA funded through payroll deductions, but they can opt out at any time and keep the account if they change jobs. Employers do not contribute to the account - they only facilitate payroll deductions. Businesses that register or certify another plan may qualify for a $300 state filing fee waiver.

Employers:

A Maryland business generally must register for MarylandSaves (or offer another retirement plan) if it:

• Has been operating for at least two years

• Has at least one W-2 employee age 18+

• Uses an automated payroll system

• Does not already offer a qualified retirement plan like a 401(k), SIMPLE IRA, or SEP IRA.

Employees:

Workers qualify for MarylandSaves if they are 18 or older and employed by a Maryland employer that participates in the program. Eligible employees can be full-time, part-time, or seasonal, and they are automatically enrolled but may opt out anytime. They must also meet the IRS income eligibility limits for contributing to a Roth IRA.

An employer-sponsored retirement plan includes a plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan), qualified annuity plan under section 403(a), tax-sheltered annuity plan under section 403(b), Simplified Employee Pension plan under section 408(k), a SIMPLE IRA plan under section 408(p), or governmental deferred compensation plan under section 457(b). It does not include payroll deduction IRAs.

While the law requires employers to provide access to a retirement program, Maryland currently does not impose a direct financial penalty for non-compliance. Instead, employers that comply can receive a waiver of the state’s $300 annual business report filing fee

Maryland will likely institute penalties for non-compliance in the future, following the lead of other states such as California which penalizes employers $250 per employee after 90 days; $500 per employee after 180 days

No. Under current law, employers are not permitted to make contributions.

Businesses in Maryland are required to file their Annual Reports to the Maryland Department of Assessment and Taxation (SDAT) as part of their annual business tax filings. SDAT will waive its $300 annual report filing fee for every year a Maryland business signs employees up for MarylandSaves and employees use the program.

Employers must register and begin sending employee payroll contributions, or claim their waiver by December 31 to receive their SDAT filing fee waiver in the following year. You may claim your SDAT annual report filing fee waiver at https://www.marylandsaves.org/claim-fee-waiver/.

SDAT recommends that you file online for efficiency and accuracy. If you file online and are eligible for a waiver, you should see that your balance due is at $0.

Most employers will be better off offering a 401(k) Plan or similar to their employees over the Maryland Saves retirement plan. Speak to one of our retirement plan experts here or Sign up for Maryland Saves here