Preserving Employee Retirement Savings Act of 2020

To establish a temporary tax credit for maintaining retirement benefits during the COVID-19 pandemic. 1. Short title This Act may be cited as the Preserving Employee Retirement Savings Act of 2020 2. Temporary credit for maintaining retirement benefits during pandemic (a) In general In the case of an eligible employer, there shall be allowed as a credit against the tax imposed by chapter 1 (b) Limitation The amount of credit allowed to the taxpayer under subsection (a) for any taxable year shall not exceed $100,000. (c) Qualified retirement contributions For purposes of this section— (1) In general The term qualified retirement contribution (2) Determining contribution to defined benefit plan In the case of a defined benefit plan (as defined in section 414(j) of such Code), the amount treated as an employer contribution under paragraph (1) shall be the amount described with respect to the plan in section 430(b)(1)(A)(i), 431(b)(2)(A), or 433(b)(2)(A) of such Code, as the case may be, or in the case of a CSEC plan that uses a spread gain funding method (as defined in section 433(j)(5)(D)) of such Code), the amount described in 433(j)(1)(B) of such Code. (3) Coordination with other assistance Such term shall not include any amount taken into account in determining any loan amount forgiven under section 1106 or 1109(d)(1)(D) of the Coronavirus Aid, Relief, and Economic Security Act. (4) Applicable retirement plan (A) In general For purposes of this section, the term applicable retirement plan (B) Plans with contribution level reduction not eligible Such term shall not include any plan, annuity contract, pension, or account which for any plan year which includes the taxable year— (i) is amended after December 31, 2019, to reduce allocations or benefit accruals; or (ii) in any case in which the employer has discretion over allocations, has a rate of contribution for any class of employees that includes an employee who is not a highly compensated employee which is less than the greater of— (I) the rate of contribution for such class for the last plan year ending before January 1, 2019; or (II) the rate of contribution for such class for the last plan year ending before January 1, 2020. For purposes of the preceding sentence, the rate of contribution shall be expressed as a percentage of compensation (as defined for the plan year for which such rate is being determined). (d) Other definitions and special rules For purposes of this section— (1) Eligible employer (A) In general The term eligible employer (i) that has a temporary substantial business hardship (within the meaning of section 412(c)(2) of such Code) for the taxable year; and (ii) in the case of employer that is not a tax-exempt or cooperative organization, the gross receipts (within the meaning of section 448(c) (B) Pre-guidance determination of hardship In the case of any determination of the credit under subsection (a) prior to the issuance of guidance by the Secretary of the Treasury as to what constitutes a temporary substantial business hardship under subparagraph (A), the taxpayer may rely on a reasonable good faith determination of whether such a hardship exists. (2) Tax-exempt or cooperative organization The term tax exempt or cooperative organization (A) any organization exempt from tax under chapter 1 (B) any organization to which subchapter T of chapter 1 of such Code applies; or (C) any organization described in section 1381(a)(2)(C) of such Code. (3) Recapture In the case of an employer allowed a credit under this section for a taxable year with respect to an applicable retirement plan, if such plan fails to meet the requirements of subsection (c)(4)(B) for the following taxable year, then the tax of the taxpayer under chapter 1 of such Code for such following taxable year shall be increased by an amount equal to the amount of the credit so allowed. (4) Aggregation rules All employees who are treated as employed by a single employer under subsections (b), (c), (m), and (o) of section 414 of such Code shall be treated as employed by a single employer for purposes of this section. In the case of a plan maintained by more than one employer, each such employer shall be treated separately for purposes of this section. (5) Third-party payors Any credit allowed under this section shall be treated as a credit described in section 3511(d)(2) of such Code. (e) Credit refundable for tax-Exempt and cooperative employers In the case of an employer that is a tax exempt or cooperative organization, the credit allowed under this section shall be treated as a credit allowed under subpart C of part IV of subchapter A of chapter 1 of such Code. Section 512(c)(12)(A) of such Code shall be applied without taking into account any such credit as income. (f) Application of section This section shall apply to the taxable year of any taxpayer that includes June 30, 2020, and such taxpayer’s first succeeding taxable year.

Summary: Preserving Employee Retirement Savings Act of 2020 This bill allows an employer that has a temporary substantial business hardship and, if not a tax-exempt or cooperative organization, does not have more that $41.5 million in gross receipts a tax credit for 20% of retirement contributions made to employee retirement accounts. The amount of such credit for any employer may not exceed $100,000 in any taxable year.