[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2512 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 2512
To amend the Internal Revenue Code of 1986 to provide a credit for re-
enrollment provisions in retirement plans of small employers.
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IN THE SENATE OF THE UNITED STATES
July 26, 2023
Mr. Cassidy (for himself and Mr. Kaine) 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 provide a credit for re-
enrollment provisions in retirement plans of small employers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. RETIREMENT PLAN RE-ENROLLMENT 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. 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' means
a provision of an eligible automatic contribution arrangement
under which each employee eligible to participate in the
arrangement who is not contributing or is contributing less
than the percentage applicable to an eligible employee in the
first year of eligibility is treated as being in such first
year of eligibility in each applicable year with respect to the
employee.
``(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'
means, with respect to an employee, such employee's
first plan year of eligibility under the arrangement
and all subsequent plan years of eligibility.
``(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' has
the meaning given such term in section 408(p)(2)(C)(i).
``(2) Eligible automatic contribution arrangement.--The
term `eligible automatic contribution arrangement' has the
meaning given such term in section 414(w)(3).''.
(b) Credit To Be Part of General Business Credit.--Subsection (b)
of section 38 of the Internal Revenue Code of 1986 is amended by
striking ``plus'' at the end of paragraph (40), by striking the period
at the end of paragraph (41) and inserting ``, plus'', and by adding at
the end the following new paragraph:
``(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) of the Internal
Revenue Code of 1986 is amended--
(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 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 45AA
the following new item:
``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.
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