Military Spouses Retirement Security Act
This bill allows a tax credit for certain small businesses that include military spouses in their retirement plans.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1273 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 1273
To amend the Internal Revenue Code of 1986 to provide a credit to small
employers for covering military spouses under retirement plans.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 21, 2021
Ms. Collins (for herself, Ms. Hassan, Mr. Lankford, and Mr. Bennet)
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 to small
employers for covering military spouses under retirement plans.
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. CREDIT FOR SMALL EMPLOYERS PROVIDING RETIREMENT PLANS FOR
MILITARY SPOUSES.
(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. SMALL EMPLOYER PROVISION OF RETIREMENT SAVINGS FOR MILITARY
SPOUSES.
``(a) In General.--For purposes of section 38, in the case of a
covered small employer, the military spouse employee retirement plan
credit determined under this section for the taxable year is an amount
equal to the sum of--
``(1) $200 for each eligible military spouse employee who
is eligible to participate in an eligible employer plan during
the plan year ending with or within such taxable year, plus
``(2) with respect to each eligible military spouse
employee participating in such plan, the lesser of--
``(A) the amount of employer contributions (other
than any contribution described in subparagraph (B) or
(C) of section 25B(d)(1)) made under all eligible
employer plans on behalf of such eligible military
spouse during the plan year ending with or within such
taxable year, or
``(B) $300.
In the case of a defined benefit plan, the amount treated as an
employer contribution under paragraph (2)(A) shall be the
increase in the participant's nonforfeitable accrued benefit
(determined by using the rules of section 417(e)(3)) reduced by
the amount of such increase attributable to employee
contributions.
``(b) Eligible Employer Plan.--For purposes of this section, the
term `eligible employer plan' means a qualified employer plan (within
the meaning of section 4972(d)) in which all eligible military spouse
employees of the covered small employer--
``(1) are eligible to participate as of the later of the
first day of the first plan year of the plan or the date the
employee has been employed for at least 2 months,
``(2) are eligible to receive matching contributions (as
defined in section 401(m)) and nonelective contributions in the
same manner as an employee (other than a highly compensated
employee) with at least 2 years of service, and
``(3) are fully vested in their accrued benefit under the
plan upon commencement of participation.
``(c) Covered Small Employer.--For purposes of this section, the
term `covered small employer' means an eligible employer (within the
meaning of section 408(p)(2)(C)(i)).
``(d) Eligible Military Spouse Employee.--
``(1) In general.--The term `eligible military spouse
employee' means any employee of the covered small employer
who--
``(A) has been employed by the employer for more
than 2 months,
``(B) is not a highly compensated employee (within
the meaning of section 414(q)), and
``(C) makes a certification to the small employer
that, as of the date such employee is hired by the
employer, such employee is married to an individual who
has performed service in the uniformed services (as
defined in chapter 43 of title 38, United States Code)
while on active duty for a period of more than 30 days
(including the date such employee is hired).
Any certification under subparagraph (C) shall include the
servicemember's name, rank, and military branch and the
employee's uniformed services identification card number.
``(2) Limitation.--An individual may not be treated as an
eligible military spouse with respect to any covered small
employer for more than 3 taxable years.''.
(b) Credit To Be Part of General Business Credit.--Section 38(b) of
the Internal Revenue Code of 1986 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) the military spouse employee retirement plan 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 the Internal Revenue Code of
1986 is amended by adding at the end the following new item:
``Sec. 45U. Small employer provision of retirement savings for military
spouses.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance. (Sponsor introductory remarks on measure: CR S2126)
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