I 

116TH CONGRESS 

2D SESSION H. R. 7927 

To amend the Internal Revenue Code of 1986 to allow a credit to small 

employers with respect to each employee who is a military spouse and 

eligible to participate in a defined contribution plan of the employer. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 4, 2020 

Mr. CROW (for himself, Mr. WENSTRUP, Mr. THORNBERRY, Mrs. MURPHY of 

Florida, Mrs. WALORSKI, Mr. PANETTA, and Mr. MARCHANT) introduced 

the following bill; which was referred to the Committee on Ways and 

Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow a 

credit to small employers with respect to each employee 

who is a military spouse and eligible to participate in 

a defined contribution plan of the employer. 

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 ‘‘Military Spouses Re5 tirement Security Act’’. 


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1 SEC. 2. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY 

2 CREDIT FOR SMALL EMPLOYERS. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following new 

6 section: 

7 ‘‘SEC. 45U. MILITARY SPOUSE RETIREMENT PLAN ELIGI8 BILITY CREDIT FOR SMALL EMPLOYERS. 

9 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

10 the case of any eligible small employer, the military spouse 

11 retirement plan eligibility credit determined under this 

12 section for any taxable year is an amount equal to the 

13 sum of— 

14 ‘‘(1) $250 with respect to each military spouse 

15 who is an employee of such employer and who is eli16 gible to participate in an eligible defined contribu17 tion plan of such employer at any time during such 

18 taxable year, plus 

19 ‘‘(2) so much of the contributions made by such 

20 employer to all such plans with respect to such em21 ployee during such taxable year as do not exceed 

22 $250. 

23 ‘‘(b) LIMITATION.—An individual shall only be taken 

24 into account as a military spouse under subsection (a) for 

25 the taxable year which includes the date on which such 

26 individual began participating in the eligible defined conVerDate Sep 11 2014 03:57 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7927.IH H7927

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1 tribution plan of the employer and the 2 succeeding tax2 able years. 

3 ‘‘(c) ELIGIBLE SMALL EMPLOYER.—For purposes of 

4 this section— 

5 ‘‘(1) IN GENERAL.—The term ‘eligible small 

6 employer’ means an eligible employer (as defined in 

7 section 408(p)(2)(C)(i)(I)). 

8 ‘‘(2) APPLICATION OF 2-YEAR GRACE PERIOD.— 

9 A rule similar to the rule of section 

10 408(p)(2)(C)(i)(II) shall apply for purposes of this 

11 section. 

12 ‘‘(d) MILITARY SPOUSE.—For purposes of this sec13 tion— 

14 ‘‘(1) IN GENERAL.—The term ‘military spouse’ 

15 means, with respect to any employer, any individual 

16 who is married (within the meaning of section 7703 

17 as of the first date that the employee is employed by 

18 the employer) to an individual who is a member of 

19 the uniformed services (as defined in section 

20 101(a)(5) of title 10, United States Code). For pur21 poses of this section, an employer may rely on an 

22 employee’s certification that such employee’s spouse 

23 is a member of the uniformed services if such certifi24 cation provides the name, rank, and service branch 

25 of such spouse. 


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1 ‘‘(2) EXCLUSION OF HIGHLY COMPENSATED

2 EMPLOYEES.—With respect to any employer, the 

3 term ‘military spouse’ shall not include any indi4 vidual if such individual is a highly compensated em5 ployee of such employer (within the meaning of sec6 tion 414(q)). 

7 ‘‘(e) ELIGIBLE DEFINED CONTRIBUTION PLAN.— 

8 For purposes of this section, the term ‘eligible defined con9 tribution plan’ means, with respect to any eligible small 

10 employer, any defined contribution plan (as defined in sec11 tion 414(i)) of such employer if, under the terms of such 

12 plan— 

13 ‘‘(1) military spouses employed by such em14 ployer are eligible to participate in such plan not 

15 later than the date which is 2 months after the date 

16 on which such individual begins employment with 

17 such employer, and 

18 ‘‘(2) military spouses who are eligible to partici19 pate in such plan— 

20 ‘‘(A) are immediately eligible to receive an 

21 amount of employer contributions under such 

22 plan which is not less than the amount of such 

23 contributions that a similarly situated partici24 pant who is not a military spouse would be eliVerDate Sep 11 2014 20:09 Aug 25, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7927.IH H7927

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1 gible to receive under such plan after 2 years 

2 of service, and 

3 ‘‘(B) immediately have a nonforfeitable 

4 right to the employee’s accrued benefit derived 

5 from employer contributions under such plan. 

6 ‘‘(f) AGGREGATION RULE.—All persons treated as a 

7 single employer under subsection (b), (c), (m), or (o) of 

8 section 414 shall be treated as one employer for purposes 

9 of this section.’’. 

10 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI11 NESS CREDIT.—Section 38(b) of such Code is amended 

12 by striking ‘‘plus’’ at the end of paragraph (32), by strik13 ing the period at the end of paragraph (33) and inserting 

14 ‘‘, plus’’, and by adding at the end the following new para15 graph: 

16 ‘‘(34) in the case of an eligible small employer 

17 (as defined in section 45U(c)), the military spouse 

18 retirement plan eligibility credit determined under 

19 section 45U(a).’’. 

20 (c) CLERICAL AMENDMENT.—The table of sections 

21 for subpart D of part IV of subchapter A of chapter 1 

22 of such Code is amended by adding at the end the fol23 lowing new item: 

‘‘Sec. 45U. Military spouse retirement plan eligibility credit for small employers.’’. 


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

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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