II 

118TH CONGRESS 

2D SESSION S. 4965 

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 

AUGUST 1, 2024 

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 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Nonprofit Re5 tirement Security Act of 2024’’. 


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•S 4965 IS

1 SEC. 2. RETIREMENT CREDITS MADE AVAILABLE TO TAX2 EXEMPT SMALL EMPLOYERS. 

3 (a) CREDIT FOR SMALL EMPLOYER PENSION PLAN

4 STARTUP COSTS.—Section 45E of the Internal Revenue 

5 Code of 1986 is amended by adding at the end the fol6 lowing new subsection: 

7 ‘‘(g) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL8 IGIBLE EMPLOYERS.— 

9 ‘‘(1) IN GENERAL.—In the case of a tax-exempt 

10 eligible employer, there shall be treated as a credit 

11 allowed under section 3111(g), and not as a credit 

12 determined under subsection (a), an amount equal to 

13 the lesser of— 

14 ‘‘(A) the amount of the credit determined 

15 under this section (without regard to this sub16 section) with respect to such employer, or 

17 ‘‘(B) the amount of payroll tax paid by the 

18 employer during the calendar year in which the 

19 taxable year begins. 

20 ‘‘(2) DEFINITIONS.—For purposes of this sub21 section— 

22 ‘‘(A) TAX-EXEMPT ELIGIBLE EMPLOYER.— 

23 The term ‘tax-exempt eligible employer’ means 

24 an eligible employer which is described in sec25 tion 501(c) and exempt from taxation under 

26 section 501(a). 


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•S 4965 IS

1 ‘‘(B) PAYROLL TAX.— 

2 ‘‘(i) IN GENERAL.—The term ‘payroll 

3 tax’ means the tax imposed by section 

4 3111(a). 

5 ‘‘(ii) SPECIAL RULE.—A rule similar 

6 to the rule of section 24(d)(2)(C) shall 

7 apply for purposes of determining the pay8 roll tax paid by an employer.’’. 

9 (b) RETIREMENT AUTO-ENROLLMENT CREDIT.— 

10 Section 45T of the Internal Revenue Code of 1986 is 

11 amended by adding at the end the following new sub12 section: 

13 ‘‘(d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL14 IGIBLE EMPLOYERS.— 

15 ‘‘(1) IN GENERAL.—In the case of a tax-exempt 

16 eligible employer, there shall be treated as a credit 

17 allowed under section 3111(g), and not as a credit 

18 determined under subsection (a), an amount equal to 

19 the lesser of — 

20 ‘‘(A) the amount of the credit determined 

21 under this section (without regard to this sub22 section) with respect to such employer, or 

23 ‘‘(B) the amount of payroll tax paid by the 

24 employer during the calendar year in which the 

25 taxable year begins. 


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•S 4965 IS

1 ‘‘(2) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) TAX-EXEMPT ELIGIBLE EMPLOYER.— 

4 The term ‘tax-exempt eligible employer’ means 

5 an eligible employer which is described in sec6 tion 501(c) and exempt from taxation under 

7 section 501(a). 

8 ‘‘(B) PAYROLL TAX.— 

9 ‘‘(i) IN GENERAL.—The term ‘payroll 

10 tax’ means the tax imposed by section 

11 3111(a). 

12 ‘‘(ii) SPECIAL RULE.—A rule similar 

13 to the rule of section 24(d)(2)(C) shall 

14 apply for purposes of determining the pay15 roll tax paid by an employer.’’. 

16 (c) PAYROLL CREDIT.—Section 3111 of the Internal 

17 Revenue Code of 1986 is amended by adding at the end 

18 the following new subsection: 

19 ‘‘(g) CREDIT FOR CERTAIN PLANS OF TAX-EXEMPT

20 EMPLOYERS.— 

21 ‘‘(1) IN GENERAL.—In the case of a tax-exempt 

22 eligible employer to which section 45E(g) or section 

23 45T(d) applies, there shall be allowed as a credit 

24 against the tax imposed by subsection (a) for cal25 endar quarters in an applicable year an amount 


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•S 4965 IS

1 equal to the amount determined under section 

2 45E(g)(1) or section 45T(d)(1), whichever is appli3 cable. 

4 ‘‘(2) LIMITATION.—The aggregate amount al5 lowed as a credit under this subsection for the cal6 endar quarters in any year shall not exceed the 

7 amount of the tax imposed by subsection (a) on 

8 wages paid with respect to the employment of all 

9 employees of the employer during such year, deter10 mined by applying a rule similar to the rule of sec11 tion 24(d)(2)(C). 

12 ‘‘(3) DEFINITIONS.—For purposes of this sub13 section— 

14 ‘‘(A) TAX-EXEMPT ELIGIBLE EMPLOYER.— 

15 The term ‘tax-exempt eligible employer’ means 

16 an eligible employer which is described in sec17 tion 501(c) and exempt from taxation under 

18 section 501(a). 

19 ‘‘(B) APPLICABLE YEAR.—The term ‘appli20 cable year’ means the calendar year referred to 

21 in section 45E(g)(1)(B) or section 

22 45T(d)(1)(B), whichever is applicable.’’. 

23 (d) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years beginning after 

25 December 31, 2024. 


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•S 4965 IS

1 (e) TRANSFERS OF FUNDS TO OLD-AGE, SURVIVORS, 

2 AND DISABILITY TRUST FUND.—There are hereby appro3 priated to the Federal Old-Age and Survivors Trust Fund 

4 and the Federal Disability Insurance Trust Fund estab5 lished under section 201 of the Social Security Act (42 

6 U.S.C. 401) amounts equal to the reduction in revenues 

7 to the Treasury by reason of the amendments made by 

8 subsections (a), (b), and (c). Amounts appropriated by the 

9 preceding sentence shall be transferred from the general 

10 fund at such times and in such manner as to replicate 

11 to the extent possible the transfers which would have oc12 curred to such Trust Fund had such amendments not 

13 been enacted. 

Æ 


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