House backs off changes to 401k contributions

House backs off changes to 401k contributions

Today House Republicans released their proposed changes to the nation’s tax code. One highly controversial change that was being proposed by GOP Congressional leaders has been dropped at this point.

The House bill makes no change to the 401k plans that allow individuals, many of whom are small business owners, to set aside up to $18,000 in pre-tax dollars for retirement. There were also no proposed changes to Individual Retirement Accounts.

Clearly the House heard from constituents like our members who adamantly oppose changes to the 401k plans, changes that would only allow contributions of pre-tax dollars up to $2,400. Any additional contributions would be taxed.

We at the South Carolina Small Business Chamber conducted a non-scientific poll of our members on the subject. Over 76 percent of the respondents have a 401k plan, 96 percent said that they would be less likely to invest in a 401k if the proposed changes would become law and all the small business respondents favored not changing the tax code related to 401k plans.

Small business owners will remain vigilant as the tax re-write plan moves through the House and Senate.