The Maryland retirement mandate for employers requires most private-sector businesses in the state to either sponsor a qualifying retirement plan or enroll their workers in MarylandSaves, a state-run Roth IRA funded by automatic payroll deductions. You fall under the mandate if your business has operated in Maryland for at least two calendar years, has at least one employee age 18 or older, and pays workers through an automated payroll system.1MarylandSaves. Program Details Employers who already offer a qualifying plan don’t have to join MarylandSaves, but they still need to certify an exemption with the state.
Which Employers Are Covered
Three conditions determine whether the mandate applies to your business. You need at least two calendar years of operation in Maryland, at least one employee over 18, and an automated payroll system.1MarylandSaves. Program Details Miss any one of the three and you’re outside the mandate, though you should still log in and certify that fact so the state has you on record.
The statute defines a covered employer broadly. Any for-profit or nonprofit entity doing business in Maryland and running payroll through a system or service qualifies. Government employers at every level, federal, state, county, and municipal, are excluded.2Maryland General Assembly. Chapter 324 (House Bill 1378) Businesses that currently offer a qualifying retirement plan, or offered one at any point during the preceding two calendar years, are also excluded from the auto-enrollment requirement.
Independent contractors paid on a 1099 do not count as employees for the mandate. Only W-2 workers on your automated payroll trigger the requirement.
Which Employees Get Auto-Enrolled
Not everyone on your payroll gets enrolled. The statute excludes employees under 18 at the start of the calendar year, employees already eligible for a qualifying plan you sponsor, and workers covered by a collective bargaining agreement that provides a multi-employer pension. Employees covered under the federal Railway Labor Act are also excluded.
The practical effect is that a mixed workforce can have both covered and uncovered workers. An 18-year-old part-timer on automated payroll is covered. A 17-year-old in the same role is not, at least until the calendar year after they turn 18.
Two Ways to Comply
You have a choice. Enroll your workers in MarylandSaves, or sponsor your own qualifying retirement plan. Qualifying plans include 401(k) and other 401(a) plans, 403(a) annuity plans, 403(b) plans, SEP plans, SIMPLE IRA plans, and 457(b) governmental deferred compensation plans.3MarylandSaves. Claim Your SDAT Annual Report Filing Fee Waiver A standard payroll-deduction IRA that isn’t part of MarylandSaves does not satisfy the mandate.
MarylandSaves is designed for minimal employer administration. You register the business, upload your roster, run payroll deductions, and keep the roster current. Running your own 401(k) or SIMPLE IRA means selecting a provider, handling compliance testing, and filing annual reports, in exchange for benefits like employer matching and higher contribution limits. Small employers with a handful of workers often find MarylandSaves the simpler path. Growing businesses that want the flexibility of a full plan may prefer the tradeoff.
How to Register for MarylandSaves
Before starting the online registration, gather your federal EIN, your State Department of Assessments and Taxation (SDAT) identifier, and the MarylandSaves Access Code the state mailed or emailed you. If you can’t find the Access Code, you can look it up on the MarylandSaves website.1MarylandSaves. Program Details You’ll also need your payroll provider’s name and pay schedule, the bank account details you’ll use to fund contributions, and a roster of each covered employee with full name, contact information, date of birth, and Social Security number.4MarylandSaves. How to Set Up Your MarylandSaves Employer Account
The portal walks you through building a business profile with your SDAT number and Access Code, creating login credentials, entering payroll and bank details, and uploading the employee roster. The system validates your data before final submission, and you’ll get an automated confirmation email once the state has your information on file.
MarylandSaves offers automated integrations with Gusto, Paylocity, Payroll Specialties, and QuickBooks Online at no charge from the program itself.5MarylandSaves. Payroll Providers If your provider isn’t on that list, you can still participate; you’ll just submit contribution data and funding manually through the portal after each payroll run.
How to Certify an Exemption
If your business already sponsors a qualifying retirement plan, don’t register for MarylandSaves. Certify your exemption through the program portal instead. You’ll need your EIN, your Access Code, and the type of plan you offer.6MarylandSaves. Certify Your Business Exemption From the Program Businesses with no employees can certify online too.
Do not skip this step on the assumption that the state already knows about your plan. Certification is what keeps you in good standing and preserves your eligibility for the SDAT filing fee waiver.
What Happens After You Register
Once you register, MarylandSaves contacts your employees directly with enrollment information. Each employee then has a 30-day notice period to review the program and decide. If someone opts out during those 30 days, no deductions are made and no account is activated.7MarylandSaves. What Happens if I Opt Out If they take no action, payroll deductions start automatically when the 30 days expire.
After that, your ongoing responsibilities settle into a routine. Record each employee’s enrollment decision, set up deduction rates, and submit contribution information and funding through the portal.1MarylandSaves. Program Details Add new hires who meet the age threshold, mark former employees as terminated, and update deduction rates when workers request changes or when annual auto-escalation increases their contribution. Falling behind on roster maintenance creates problems for both you and your employees and can trigger compliance issues.
Contribution Rates and Federal IRA Limits
MarylandSaves contributions go into a Roth IRA owned by the employee, funded with after-tax dollars. The default contribution rate is 5% of gross pay, and an automatic escalation feature raises that rate by 1% each year until it reaches a 10% cap.8MarylandSaves. Program Details Employees can change their rate or opt out at any time, and the account travels with them if they leave your company.
Because these are Roth IRAs, federal contribution limits apply. For 2026, the annual IRA contribution limit is $7,500. Workers 50 and older can add $1,100 in catch-up contributions for a total of $8,600.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 The cap applies across all of an employee’s IRAs combined, so workers who also contribute to a personal Roth need to watch the total.
Roth eligibility phases out at higher incomes. For 2026, single filers begin losing eligibility at $153,000 of modified adjusted gross income and lose it fully at $168,000. Married couples filing jointly hit the phase-out range between $242,000 and $252,000.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Automatic enrollment does not screen for income, so high earners on your payroll should be told to opt out to avoid excess-contribution penalties from the IRS.
The $300 SDAT Filing Fee Waiver
Maryland pairs the mandate with a $300 waiver on the annual SDAT report filing fee. Businesses that actively participate in MarylandSaves and make at least one payroll-deducted contribution during the calendar year qualify automatically; MarylandSaves reports the qualification data to SDAT, so nothing extra is required from you.3MarylandSaves. Claim Your SDAT Annual Report Filing Fee Waiver
Employers who sponsor their own qualifying plan can also claim the waiver, but they must submit the fee waiver form every year. The deadline for the following year’s waiver is December 31. Forms submitted by December 31, 2026, qualify for the 2027 waiver.10MarylandSaves. Am I Eligible to Receive the SDAT Annual Report Filing Fee Waiver in 2026 Sole proprietorships and trade name registrations are not eligible for the waiver regardless of their retirement plan status.
Penalties for Ignoring the Mandate
The statute explicitly bars noncompliant employers from receiving the $300 SDAT filing fee waiver. That is the most immediate and reliable consequence, and it repeats every year you stay out of compliance.
Employers who remain noncompliant may also face enforcement through the Comptroller’s office. If you receive a notice of assessment for a related penalty, you have 30 days from the date on the notice to file an appeal, submitted through the MyCOMConnect portal by selecting the option to appeal an assessment.11Comptroller of Maryland. Maryland Online Appeal Request Miss that 30-day window and an attorney from the Compliance Division will still contact you, but with a weaker position on your side. Registering, or certifying an exemption, before enforcement starts is the cheapest path every time.