A bill to amend the Internal Revenue Code of 1986 to provide a credit for re-enrollment provisions in retirement plans of small employers.

To amend the Internal Revenue Code of 1986 to provide a credit for re-enrollment provisions in retirement plans of small employers. 1. Retirement plan re-enrollment credit for small employers (a) In general Subpart D of part IV of subchapter A of chapter 1 45BB. Credit for re-enrollment provisions in plans provided by small employers (a) In general For purposes of section 38, in the case of an eligible employer, the retirement re-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 a re-enrollment provision in an eligible automatic contribution arrangement under a qualified employer plan (as defined in section 4972(d)) maintained 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 provision described in paragraph (1) is included in the plan for such year. (c) Re-Enrollment provision For purposes of this section— (1) In general The term re-enrollment provision (2) Election out The election treated as having been made under paragraph (1) shall cease to apply with respect to any employee if such employee makes an affirmative election— (A) not to have such contributions made, or (B) to make elective contributions at a level specified in such affirmative election. (3) Applicable year every third year (A) In general The term applicable year (B) Exception Following any applicable year of an employee (determined after the application of this subparagraph), the plan may elect to treat the next 1 or 2 plan years as not being applicable years with respect to such employee. (d) Definitions For purposes of this section— (1) Eligible employer The term eligible employer (2) Eligible automatic contribution arrangement The term eligible automatic contribution arrangement . (b) Credit To be part of general business credit Subsection (b) of section 38 plus , plus (42) in the case of an eligible employer (as defined in section 45BB(d)(1)), the retirement re-enrollment credit determined under section 45BB(a). . (c) Treatment of credit for certified professional employer organizations Paragraph (2) of section 3511(d) (1) by redesignating subparagraphs (G), (H), and (I) as subparagraphs (H), (I), and (J) respectively, and (2) by inserting after subparagraph (F) the following new subparagraph: (G) section 45BB (retirement re-enrollment credit), . (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 Sec. 45BB. Credit for re-enrollment provisions in plans provided by small employers. . (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023.

Summary: This bill allows small employers who have a re-enrollment provision in their retirement plans a tax credit for $500 in any taxable year occurring during a specified three-year credit period.