SEC. 2. RETIREMENT CREDITS MADE AVAILABLE TO TAX- 
EXEMPT SMALL EMPLOYERS. 
(a) CREDIT FOR SMALL EMPLOYER PENSION PLAN 
STARTUP COSTS.—Section 45E of the Internal Revenue 
Code of 1986 is amended by adding at the end the fol-
lowing new subsection: 
‘‘(g) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL-
IGIBLE EMPLOYERS.— 
‘‘(1) IN GENERAL.—In the case of a tax-exempt 
eligible employer, there shall be treated as a credit 
allowed under section 3111(g), and not as a credit 
determined under subsection (a), an amount equal to 
the lesser of— 
‘‘(A) the amount of the credit determined 
under this section (without regard to this sub-
section) with respect to such employer, or 
‘‘(B) the amount of payroll tax paid by the 
employer during the calendar year in which the 
taxable year begins. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) TAX-EXEMPT ELIGIBLE EMPLOYER.— 
The term ‘tax-exempt eligible employer’ means 
an eligible employer which is described in sec-
tion 501(c) and exempt from taxation under 
section 501(a). 
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‘‘(B) PAYROLL TAX.— 
‘‘(i) IN GENERAL.—The term ‘payroll 
tax’ means the tax imposed by section 
3111(a). 
‘‘(ii) SPECIAL RULE.—A rule similar 
to the rule of section 24(d)(2)(C) shall 
apply for purposes of determining the pay-
roll tax paid by an employer.’’. 
(b) RETIREMENT AUTO-ENROLLMENT CREDIT.— 
Section 45T of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new sub-
section: 
‘‘(d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL-
IGIBLE EMPLOYERS.— 
‘‘(1) IN GENERAL.—In the case of a tax-exempt 
eligible employer, there shall be treated as a credit 
allowed under section 3111(g), and not as a credit 
determined under subsection (a), an amount equal to 
the lesser of— 
‘‘(A) the amount of the credit determined 
under this section (without regard to this sub-
section) with respect to such employer, or 
‘‘(B) the amount of payroll tax paid by the 
employer during the calendar year in which the 
taxable year begins. 
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‘‘(2) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) TAX-EXEMPT ELIGIBLE EMPLOYER.— 
The term ‘tax-exempt eligible employer’ means 
an eligible employer which is described in sec-
tion 501(c) and exempt from taxation under 
section 501(a). 
‘‘(B) PAYROLL TAX.— 
‘‘(i) IN GENERAL.—The term ‘payroll 
tax’ means the tax imposed by section 
3111(a). 
‘‘(ii) SPECIAL RULE.—A rule similar 
to the rule of section 24(d)(2)(C) shall 
apply for purposes of determining the pay-
roll tax paid by an employer.’’. 
(c) PAYROLL CREDIT.—Section 3111 of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subsection: 
‘‘(g) CREDIT FOR CERTAIN PLANS OF TAX-EXEMPT 
EMPLOYERS.— 
‘‘(1) IN GENERAL.—In the case of a tax-exempt 
eligible employer to which section 45E(g) or section 
45T(d) applies, there shall be allowed as a credit 
against the tax imposed by subsection (a) for cal-
endar quarters in an applicable year an amount 
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equal to the amount determined under section 
45E(g)(1) or section 45T(d)(1), whichever is appli-
cable. 
‘‘(2) LIMITATION.—The aggregate amount al-
lowed as a credit under this subsection for the cal-
endar quarters in any year shall not exceed the 
amount of the tax imposed by subsection (a) on 
wages paid with respect to the employment of all 
employees of the employer during such year, deter-
mined by applying a rule similar to the rule of sec-
tion 24(d)(2)(C). 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) TAX-EXEMPT ELIGIBLE EMPLOYER.— 
The term ‘tax-exempt eligible employer’ means 
an eligible employer which is described in sec-
tion 501(c) and exempt from taxation under 
section 501(a). 
‘‘(B) APPLICABLE YEAR.—The term ‘appli-
cable year’ means the calendar year referred to 
in 
section 
45E(g)(1)(B) 
or 
section 
45T(d)(1)(B), whichever is applicable.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
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(e) TRANSFERS OF FUNDS TO OLD-AGE, SURVIVORS, 
AND DISABILITY TRUST FUND.—There are hereby appro-
priated to the Federal Old-Age and Survivors Trust Fund 
and the Federal Disability Insurance Trust Fund estab-
lished under section 201 of the Social Security Act (42 
U.S.C. 401) amounts equal to the reduction in revenues 
to the Treasury by reason of the amendments made by 
subsections (a), (b), and (c). Amounts appropriated by the 
preceding sentence shall be transferred from the general 
fund at such times and in such manner as to replicate 
to the extent possible the transfers which would have oc-
curred to such Trust Fund had such amendments not 
been enacted. 
Æ 
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