Military Spouses Retirement Security Act
Bill: H.R.1453 | Sponsor: Rep. Crow, Jason (D-CO)
Policy area: Taxation

Summary:
Military Spouses Retirement Security Act
This bill allows a small business employer a tax credit for each employee who is a military spouse and eligible to participate in the employer's defined contribution retirement plan.

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Spouses Retirement Security 
Act''.

SEC. 2. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY CREDIT FOR SMALL 
              EMPLOYERS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45U. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY CREDIT FOR 
              SMALL EMPLOYERS.

    ``(a) In General.--For purposes of section 38, in the case of any 
eligible small employer, the military spouse retirement plan 
eligibility credit determined under this section for any taxable year 
is an amount equal to the sum of--
            ``(1) $250 with respect to each military spouse who is an 
        employee of such employer and who is eligible to participate in 
        an eligible defined contribution plan of such employer at any 
        time during such taxable year, plus
            ``(2) so much of the contributions made by such employer to 
        all such plans with respect to such employee during such 
        taxable year as do not exceed $250.
    ``(b) Limitation.--An individual shall only be taken into account 
as a military spouse under subsection (a) for the taxable year which 
includes the date on which such individual began participating in the 
eligible defined contribution plan of the employer and the 2 succeeding 
taxable years.
    ``(c) Eligible Small Employer.--For purposes of this section--
            ``(1) In general.--The term `eligible small employer' means 
        an eligible employer (as defined in section 
        408(p)(2)(C)(i)(I)).
            ``(2) Application of 2-year grace period.--A rule similar 
        to the rule of section 408(p)(2)(C)(i)(II) shall apply for 
        purposes of this section.
    ``(d) Military Spouse.--For purposes of this section--
            ``(1) In general.--The term `military spouse' means, with 
        respect to any employer, any individual who is married (within 
        the meaning of section 7703 as of the first date that the 
        employee is employed by the employer) to an individual who is a 
        member of the uniformed services (as defined in section 
        101(a)(5) of title 10, United States Code). For purposes of 
        this section, an employer may rely on an employee's 
        certification that such employee's spouse is a member of the 
        uniformed services if such certification provides the name, 
        rank, and service branch of such spouse.
            ``(2) Exclusion of highly compensated employees.--With 
        respect to any employer, the term `military spouse' shall not 
        include any individual if such individual is a highly 
        compensated employee of such employer (within the meaning of 
        section 414(q)).
    ``(e) Eligible Defined Contribution Plan.--For purposes of this 
section, the term `eligible defined contribution plan' means, with 
respect to any eligible small employer, any defined contribution plan 
(as defined in section 414(i)) of such employer if, under the terms of 
such plan--
            ``(1) military spouses employed by such employer are 
        eligible to participate in such plan not later than the date 
        which is 2 months after the date on which such individual 
        begins employment with such employer, and
            ``(2) military spouses who are eligible to participate in 
        such plan--
                    ``(A) are immediately eligible to receive an amount 
                of employer contributions under such plan which is not 
                less than the amount of such contributions that a 
                similarly situated participant who is not a military 
                spouse would be eligible to receive under such plan 
                after 2 years of service, and
                    ``(B) immediately have a nonforfeitable right to 
                the employee's accrued benefit derived from employer 
                contributions under such plan.
    ``(f) Aggregation Rule.--All persons treated as a single employer 
under subsection (b), (c), (m), or (o) of section 414 shall be treated 
as one employer for purposes of this section.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) of such Code is amended by striking ``plus'' at the end of 
paragraph (32), by striking the period at the end of paragraph (33) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(34) in the case of an eligible small employer (as 
        defined in section 45U(c)), the military spouse retirement plan 
        eligibility credit determined under section 45U(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

``Sec. 45U. Military spouse retirement plan eligibility credit for 
                            small employers.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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