119-s2365

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2365 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2365

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.

_______________________________________________________________________

 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.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Small Nonprofit Retirement Security 
Act of 2025''.

SEC. 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.
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