H.R. 1938 – Small Employer Retirement Savings Auto-Enrollment Credit Act

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Updated April 14, 2026 at 3:25 AM UTC

The Small Employer Retirement Savings Auto‑Enrollment Credit Act would give small businesses a tax credit when they set up an automatic‑enrollment retirement savings option for their employees. The credit is $500 per year for each of the first three years the employer offers the auto‑enrollment feature. It applies to eligible small employers that sponsor a qualified retirement plan and is added to the existing general business credit.

Key Provisions

Provides a $500 tax credit per taxable year for up to three years to eligible small employers that include an automatic contribution arrangement in a qualified retirement plan.
The three‑year credit period starts with the first year the employer offers the auto‑enrollment feature and only continues while the arrangement remains in the plan.
Adds the new credit to the general business credit calculation under section 38 of the Internal Revenue Code.
Applies to taxable years beginning after December 31, 2019.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

March 27, 2019

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HouseIntro Referral

Introduced in House

March 27, 2019

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

March 27, 2019

Bill Text

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Introduced in HouseIssued March 27, 2019

I

116th CONGRESS

1st Session

H. R. 1938

IN THE HOUSE OF REPRESENTATIVES

March 27, 2019

Mrs. Trahan (for herself and Mr. Kelly of Pennsylvania) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide a credit to small employers providing an eligible automatic contribution arrangement under a retirement savings plan.

1.

Short title

This Act may be cited as the Small Employer Retirement Savings Auto-Enrollment Credit Act.

2.

Small employer retirement savings automatic enrollment credit

(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:

45T.

Auto-enrollment credit for retirement savings options provided by small employers

(a)

In general

For purposes of section 38, in the case of an eligible employer, the retirement auto-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 an eligible automatic contribution arrangement (as defined in section 414(w)(3)) in a qualified employer plan (as defined in section 4972(d)) sponsored 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 arrangement described in paragraph (1) is included in the plan for such year.

(c)

Eligible employer

For purposes of this section, the term eligible employer has the meaning given such term in section 408(p)(2)(C)(i).

.

(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 (31), by striking the period at the end of paragraph (32) and inserting , plus, and by adding at the end the following new paragraph:

(33)

in the case of an eligible employer (as defined in section 45T(c)), the retirement auto-enrollment credit determined under section 45T(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 inserting after the item relating to section 45S the following new item:

Sec. 45T. Auto-enrollment credit for retirement savings options provided by small employers.

.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2019.