Employer Plan Tax Credits for Small Nonprofits Proposed

Senators James Lankford (R-OK) and Catherine Cortez Masto (D-NV) have introduced the Small Nonprofit Retirement Security Act. The bill would make tax credits available to tax exempt small employers for employer plan startup costs and the auto-enrollment credit.

Eligible employers are those organized under Internal Revenue Code Section (IRC Sec. 501(c)) and exempt from taxation under IRC Sec. 501(a). The proposal provides for a payroll tax credit for plan start-up costs, up to $5,000 per year for up to three years. Additionally, eligible employers that offer an automatic enrollment feature may be eligible for a $500 payroll tax credit for up to three years.