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Entering Form 8881 credit for small employer pension plan startup costs in Lacerte

by Intuit Updated 2 months ago

This article will assist you with entering amounts for Form 8881, Credit for Small Employer Pension Plan Startup Costs. Follow the steps below for the applicable module.

What's new for Form 8881 for tax year 2023:

  • Increase in limit for the small employer pension plan startup costs credit. The Further Consolidated Appropriations Act, 2020, increased the credit limit for the credit for small employer pension plan startup costs.
  • New credit for small employer automatic enrollment in retirement savings. The Further Consolidated Appropriations Act, 2020, created a new credit for small employers with an auto-enrollment option for retirement savings.
  • Changes to the form. The title of Form 8881 is changed to Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment. Also, the form now has two parts. Part I to claim the credit for small employer pension plan startup costs. Part II to claim the credit for small employer auto-enrollment in retirement savings.

To enter amounts for Form 8881 in a Corporate return for tax year 2023 and newer:

  1. Go to Screen 28, General Business Credits.
  2. From the Sections list, select Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment and Military Spouse Participation (8881).
  3. Enter any other applicable fields in this section.

To enter amounts for Form 8881 in a Partnership return for tax year 2023 and newer:

  1. Go to Screen 20, Credits.
  2. Select Other Credits on the left side.
  3. From the Sections list, select Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment and Military Spouse Participation (8881).
  4. Enter any other applicable fields in this section.

To enter amounts for Form 8881 in an Individual return for tax year 2023 and newer:

  1. Go to Screen 34, General Bus. & Passive Act. Credits.
  2. From the Sections list, select Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment and Military Spouse Participation (8881).
  3. Enter any other applicable fields in this section.

To enter amounts for Form 8881 in a Corporate return:

  1. Go to Screen 28 on the left panel.
  2. Select the section Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment (8881) from the lower left section menu.
  3. Enter the applicable information.

To enter amounts for Form 8881 in a Partnership return:

  1. Go to Screen 20, Credits.
  2. Select Other Credits from the top-left section menu.
  3. Scroll down to the section Small Employer Pension Plan Startup Costs and Auto-Enrollment Credit (Form 8881).
    • You can also select this section on the bottom left panel to jump directly to it.
  4. Enter the applicable information.

To enter amounts for Form 8881 in an Individual return:

  1. Go to Screen 34, General Bus. & Passive Act. Credits.
  2. From the Sections list, select Other General Business Credits.
  3. Scroll down to the Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment subsection.
  4. Enter the Qualified startup costs (8881 Part 1).
  5. Enter any other applicable fields in this section.
Lacerte Tax

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