S. 2365

119 S2365 IS: Small Nonprofit Retirement Security Act of 2025
 U.S. Senate
 2025-07-21
 text/xml
 EN
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 II  119th CONGRESS  1st Session  S. 2365  IN THE SENATE OF THE UNITED STATES   July 21, 2025   Mr. Lankford  (for himself and  Ms. Cortez Masto ) introduced the following bill; which was read twice and referred to the  Committee on Finance    A BILL
To amend the Internal Revenue Code of 1986 to make the credit for small employer pension plan startup costs and the retirement auto-enrollment credit available to tax-exempt eligible small employers.
1.
Short title
This Act may be cited as the   Small Nonprofit Retirement Security Act of 2025  .
2.
Retirement credits made available to tax-exempt small employers
(a)
Credit for small employer pension plan startup costs
 Section 45E  of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
(g)
Credit made available to tax-Exempt eligible employers
(1)
In general
In the case of a tax-exempt eligible employer, there shall be treated as a credit allowed under section 3111(g), and not as a credit determined under subsection (a), an amount equal to the lesser of—
(A)
the amount of the credit determined under this section (without regard to this subsection) with respect to such employer, or
(B)
the amount of payroll tax paid by the employer during the calendar year in which the taxable year begins.
(2)
Definitions
For purposes of this subsection—
(A)
Tax-exempt eligible employer
The term  tax-exempt eligible employer  means an eligible employer which is described in section 501(c) and exempt from taxation under section 501(a).
(B)
Payroll tax
(i)
In general
The term  payroll tax  means the tax imposed by section 3111(a).
(ii)
Special rule
A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of determining the payroll tax paid by an employer.
 .
(b)
Retirement auto-Enrollment credit
 Section 45T  of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
(d)
Credit made available to tax-Exempt eligible employers
(1)
In general
In the case of a tax-exempt eligible employer, there shall be treated as a credit allowed under section 3111(g), and not as a credit determined under subsection (a), an amount equal to the lesser of —
(A)
the amount of the credit determined under this section (without regard to this subsection) with respect to such employer, or
(B)
the amount of payroll tax paid by the employer during the calendar year in which the taxable year begins.
(2)
Definitions
For purposes of this subsection—
(A)
Tax-exempt eligible employer
The term  tax-exempt eligible employer  means an eligible employer which is described in section 501(c) and exempt from taxation under section 501(a).
(B)
Payroll tax
(i)
In general
The term  payroll tax  means the tax imposed by section 3111(a).
(ii)
Special rule
A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of determining the payroll tax paid by an employer.
 .
(c)
Payroll credit
 Section 3111  of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
(g)
Credit for certain plans of tax-Exempt employers
(1)
In general
In the case of a tax-exempt eligible employer to which section 45E(g) or section 45T(d) applies, there shall be allowed as a credit against the tax imposed by subsection (a) for calendar quarters in an applicable year an amount equal to the amount determined under section 45E(g)(1) or section 45T(d)(1), whichever is applicable.
(2)
Limitation
The aggregate amount allowed as a credit under this subsection for the calendar quarters in any year shall not exceed the amount of the tax imposed by subsection (a) on wages paid with respect to the employment of all employees of the employer during such year, determined by applying a rule similar to the rule of section 24(d)(2)(C).
(3)
Definitions
For purposes of this subsection—
(A)
Tax-exempt eligible employer
The term  tax-exempt eligible employer  means an eligible employer which is described in section 501(c) and exempt from taxation under section 501(a).
(B)
Applicable year
The term  applicable year  means the calendar year referred to in section 45E(g)(1)(B) or section 45T(d)(1)(B), whichever is applicable.
 .
(d)
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
(e)
Transfers of Funds to Old-Age, Survivors, and Disability Trust Fund
There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) amounts equal to the reduction in revenues to the Treasury by reason of the amendments made by subsections (a), (b), and (c). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted.