H.R. 1453 – Reading Mode

117th CONGRESS

1st Session

H. R. 1453

IN THE HOUSE OF REPRESENTATIVES

March 1, 2021

Mr. Crow (for himself, Mr. Wenstrup, Mr. Bacon, Mr. Carter of Texas, Mr. Crist, Mr. Fitzpatrick, Ms. Houlahan, Mr. Kelly of Pennsylvania, Mr. Kelly of Mississippi, Mr. Panetta, Mr. Perlmutter, Mr. Stewart, Mr. Taylor, Ms. Titus, Mrs. Wagner, and Mrs. Walorski) 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 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.

Short title

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

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:

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.