Federal Tax, Tax

Business Owners: You Can now Offer PLESAs to Your Employees

With the arrival of 2024, employers can opt to offer their employees pension-linked emergency savings accounts (PLESAs). Authorized by the SECURE 2.0 Act, these are individual accounts within a defined benefit plan, though participation in the defined benefit plan isn’t required. PLESAs are designed to encourage saving for emergencies, with a maximum balance of $2,500, though employers may set a lower limit. PLESAs are treated as Roth accounts, which means that contributions aren’t tax deductible, but withdrawals are generally tax-free. At least one withdrawal a month must be allowed. Here’s guidance from the IRS: https://bit.ly/3RRiKBC. Contact us with questions © 2024