II 

117TH CONGRESS 

2D SESSION S. 4153 

To amend the Internal Revenue Code of 1986 to enhance the credit for 

small employer pension plan startup costs. 

IN THE SENATE OF THE UNITED STATES 

MAY 5, 2022 

Mr. HICKENLOOPER 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 enhance 

the credit for small employer pension plan startup costs. 

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 ‘‘Incentivizing Small 

5 Business Retirement Savings Act’’. 

6 SEC. 2. CREDITS FOR EMPLOYER CONTRIBUTIONS BY CER7 TAIN ELIGIBLE EMPLOYERS. 

8 (a) IN GENERAL.—Section 45E of the Internal Rev9 enue Code of 1986 is amended by adding at the end the 

10 following new subsection: 


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1 ‘‘(f) ADDITIONAL CREDIT FOR EMPLOYER CON2 TRIBUTIONS BY CERTAIN ELIGIBLE EMPLOYERS.— 

3 ‘‘(1) IN GENERAL.—In the case of an eligible 

4 employer, the credit allowed for the taxable year 

5 under subsection (a) (determined without regard to 

6 this subsection, and after the application of sub7 section (b)) shall be increased by an amount equal 

8 to the applicable percentage of employer contribu9 tions (other than any elective deferrals (as defined 

10 in section 402(g)(3))) made by the employer to an 

11 eligible employer plan (other than a defined benefit 

12 plan (as defined in section 414(j))) for the taxable 

13 year. 

14 ‘‘(2) LIMITATIONS.— 

15 ‘‘(A) DOLLAR LIMITATION.—The amount 

16 determined under paragraph (1) (before the ap17 plication of subparagraph (B)) with respect to 

18 any employee of the employer shall not exceed 

19 $1,000. 

20 ‘‘(B) CREDIT PHASE-OUT.—With respect 

21 to any taxable year, the $1,000 amount under 

22 subparagraph (A) shall be reduced by 2 percent 

23 for each employee by which the number of em24 ployees of the employer for the preceding tax25 able year exceeds 50. 


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1 ‘‘(C) ONLY NON-HIGHLY COMPENSATED

2 EMPLOYEES TAKEN INTO ACCOUNT.—For pur3 poses of paragraph (1), only contributions with 

4 respect to employees who are not highly com5 pensated employee (as defined in section 

6 414(q)) shall be taken into account. 

7 ‘‘(3) APPLICABLE PERCENTAGE.—For purposes 

8 of this subsection, the applicable percentage is— 

9 ‘‘(A) for the first credit year with respect 

10 to the employer for purposes of subsection (b) 

11 and the taxable year immediately following such 

12 first credit year, 100 percent, 

13 ‘‘(B) for the 2nd taxable year following 

14 such first credit year, 75 percent, 

15 ‘‘(C) for the 3rd taxable year following 

16 such first credit year, 50 percent, 

17 ‘‘(D) for the 4th taxable year following 

18 such first credit year, 25 percent, and 

19 ‘‘(E) zero percent thereafter.’’. 

20 (b) DISALLOWANCE OF DEDUCTION.—Section 

21 45E(e)(2) of the Internal Revenue Code of 1986 is amend22 ed to read as follows: 

23 ‘‘(2) DISALLOWANCE OF DEDUCTION.—No de24 duction shall be allowed— 


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1 ‘‘(A) for that portion of the qualified start2 up costs paid or incurred for the taxable year 

3 which is equal to so much of the portion of the 

4 credit determined under subsection (a) as is 

5 properly allocable to such costs, or 

6 ‘‘(B) for that portion of the employer con7 tributions made by the employer for the taxable 

8 year which is equal to so much of the credit in9 crease determined under subsection (f) as is 

10 properly allocable to such contributions.’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 the date of the enactment of this Act. 

Æ 


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