Summary of HR 4548: Small Nonprofit Retirement Security Act of 2025

Bill Information:
- Bill Number: HR 4548
- Title: Small Nonprofit Retirement Security Act of 2025
- Status: Introduced in House
- Introduced: July 21, 2025
- Classification: Bill

Purpose and Intent

The Small Nonprofit Retirement Security Act of 2025 aims to enhance retirement security for employees of small tax-exempt organizations by amending the Internal Revenue Code. The bill seeks to make tax credits for pension plan startup costs and retirement auto-enrollment available to eligible small employers that are tax-exempt, thereby encouraging these organizations to establish retirement plans for their employees.

Key Provisions

1. Credit for Small Employer Pension Plan Startup Costs

• The bill amends Section 45E of the Internal Revenue Code to allow tax-exempt eligible employers to claim a credit for pension plan startup costs.
• The credit is defined as the lesser of:
  • The amount of the credit determined under this section.
  • The amount of payroll tax paid by the employer during the calendar year.

2. Retirement Auto-Enrollment Credit

• The bill also modifies Section 45T to extend the retirement auto-enrollment credit to tax-exempt eligible employers.
• Similar to the startup costs credit, the auto-enrollment credit is limited to the lesser of:
  • The amount of the credit determined under this section.
  • The amount of payroll tax paid by the employer during the calendar year.

3. Payroll Credit

• An additional amendment to Section 3111 introduces a payroll credit for tax-exempt eligible employers, allowing them to offset payroll taxes based on the credits available under Sections 45E and 45T.
• The total credit cannot exceed the payroll taxes imposed on wages paid to all employees during the year.

4. Definitions

• Tax-Exempt Eligible Employer: Defined as an employer described in Section 501(c) and exempt from taxation under Section 501(a).
• Payroll Tax: Refers to the tax imposed by Section 3111(a).

5. Effective Date

• The amendments will apply to taxable years beginning after December 31, 2024.

Impact

The bill is expected to:
- Encourage Small Nonprofits: By providing financial incentives, the legislation aims to motivate small tax-exempt organizations to establish retirement plans, thereby improving retirement security for their employees.
- Broaden Access to Retirement Benefits: This initiative could significantly increase the number of employees in the nonprofit sector who have access to retirement savings options.

Procedural Aspects

• Legislative Actions:

  • Introduced and referred to the House Committee on Ways and Means on July 21, 2025.

• Sponsors:

  • Primary Sponsor: Vern Buchanan
  • Cosponsors: Blake D. Moore, Jimmy Panetta, Bradley Scott Schneider

• Related Bills:

  • S 2365 (companion bill in the Senate)

This summary provides a comprehensive overview of HR 4548, highlighting its purpose, key provisions, and potential impact on small tax-exempt employers and their employees.