Section 1 Short title
This Act may be cited as the “Small Employer Retirement Savings Auto-Enrollment Credit Act”.
Small Employer Retirement Savings Auto-Enrollment Credit Act
A BILL
To amend the Internal Revenue Code of 1986 to provide a credit to small employers providing an eligible automatic contribution arrangement under a retirement savings plan.
Sec. 2 Small employer retirement savings automatic enrollment credit
In general— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“45T. Auto-enrollment credit for retirement savings options provided by small employers
“(a) In general—For purposes of section 38, in the case of an eligible employer, the retirement auto-enrollment credit determined under this section for any taxable year is an amount equal to—
“(1) $500 for any taxable year occurring during the credit period, and
“(2) zero for any other taxable year.
“(b) Credit period—For purposes of subsection (a)—
“(1) In general—The credit period with respect to any eligible employer is the 3-taxable-year period beginning with the first taxable year for which the employer includes an eligible automatic contribution arrangement (as defined in section 414(w)(3)) in a qualified employer plan (as defined in section 4972(d)) sponsored by the employer.
“(2) Maintenance of arrangement—No taxable year with respect to an employer shall be treated as occurring within the credit period unless the arrangement described in paragraph (1) is included in the plan for such year.
“(c) Eligible employer—For purposes of this section, the term eligible employer has the meaning given such term in section 408(p)(2)(C)(i).”
Credit To be part of general business credit— Subsection (b) of section 38 of the Internal Revenue Code of 1986 is amended by striking “plus” at the end of paragraph (31), by striking the period at the end of paragraph (32) and inserting “, plus”, and by adding at the end the following new paragraph:
“(33) in the case of an eligible employer (as defined in section 45T(c)), the retirement auto-enrollment credit determined under section 45T(a).”
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 45S the following new item:
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2019.