I 117TH CONGRESS 1ST SESSION H. R. 1453 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. 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 Pennsyl- vania, 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. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Military Spouses Re- 4 tirement Security Act’’. 5 VerDate Sep 11 2014 05:17 Apr 14, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1453.IH H1453 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 1453 IH SEC. 2. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY 1 CREDIT FOR SMALL EMPLOYERS. 2 (a) IN GENERAL.—Subpart D of part IV of sub- 3 chapter A of chapter 1 of the Internal Revenue Code of 4 1986 is amended by adding at the end the following new 5 section: 6 ‘‘SEC. 45U. MILITARY SPOUSE RETIREMENT PLAN ELIGI- 7 BILITY CREDIT FOR SMALL EMPLOYERS. 8 ‘‘(a) IN GENERAL.—For purposes of section 38, in 9 the case of any eligible small employer, the military spouse 10 retirement plan eligibility credit determined under this 11 section for any taxable year is an amount equal to the 12 sum of— 13 ‘‘(1) $250 with respect to each military spouse 14 who is an employee of such employer and who is eli- 15 gible to participate in an eligible defined contribu- 16 tion plan of such employer at any time during such 17 taxable year, plus 18 ‘‘(2) so much of the contributions made by such 19 employer to all such plans with respect to such em- 20 ployee during such taxable year as do not exceed 21 $250. 22 ‘‘(b) LIMITATION.—An individual shall only be taken 23 into account as a military spouse under subsection (a) for 24 the taxable year which includes the date on which such 25 individual began participating in the eligible defined con- 26 VerDate Sep 11 2014 05:17 Apr 14, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1453.IH H1453 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 1453 IH tribution plan of the employer and the 2 succeeding tax- 1 able years. 2 ‘‘(c) ELIGIBLE SMALL EMPLOYER.—For purposes of 3 this section— 4 ‘‘(1) IN GENERAL.—The term ‘eligible small 5 employer’ means an eligible employer (as defined in 6 section 408(p)(2)(C)(i)(I)). 7 ‘‘(2) APPLICATION OF 2-YEAR GRACE PERIOD.— 8 A rule similar to the rule of section 9 408(p)(2)(C)(i)(II) shall apply for purposes of this 10 section. 11 ‘‘(d) MILITARY SPOUSE.—For purposes of this sec- 12 tion— 13 ‘‘(1) IN GENERAL.—The term ‘military spouse’ 14 means, with respect to any employer, any individual 15 who is married (within the meaning of section 7703 16 as of the first date that the employee is employed by 17 the employer) to an individual who is a member of 18 the uniformed services (as defined in section 19 101(a)(5) of title 10, United States Code). For pur- 20 poses of this section, an employer may rely on an 21 employee’s certification that such employee’s spouse 22 is a member of the uniformed services if such certifi- 23 cation provides the name, rank, and service branch 24 of such spouse. 25 VerDate Sep 11 2014 05:17 Apr 14, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1453.IH H1453 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 1453 IH ‘‘(2) EXCLUSION OF HIGHLY COMPENSATED 1 EMPLOYEES.—With respect to any employer, the 2 term ‘military spouse’ shall not include any indi- 3 vidual if such individual is a highly compensated em- 4 ployee of such employer (within the meaning of sec- 5 tion 414(q)). 6 ‘‘(e) ELIGIBLE DEFINED CONTRIBUTION PLAN.— 7 For purposes of this section, the term ‘eligible defined con- 8 tribution plan’ means, with respect to any eligible small 9 employer, any defined contribution plan (as defined in sec- 10 tion 414(i)) of such employer if, under the terms of such 11 plan— 12 ‘‘(1) military spouses employed by such em- 13 ployer are eligible to participate in such plan not 14 later than the date which is 2 months after the date 15 on which such individual begins employment with 16 such employer, and 17 ‘‘(2) military spouses who are eligible to partici- 18 pate in such plan— 19 ‘‘(A) are immediately eligible to receive an 20 amount of employer contributions under such 21 plan which is not less than the amount of such 22 contributions that a similarly situated partici- 23 pant who is not a military spouse would be eli- 24 VerDate Sep 11 2014 05:17 Apr 14, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1453.IH H1453 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 1453 IH gible to receive under such plan after 2 years 1 of service, and 2 ‘‘(B) immediately have a nonforfeitable 3 right to the employee’s accrued benefit derived 4 from employer contributions under such plan. 5 ‘‘(f) AGGREGATION RULE.—All persons treated as a 6 single employer under subsection (b), (c), (m), or (o) of 7 section 414 shall be treated as one employer for purposes 8 of this section.’’. 9 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI- 10 NESS CREDIT.—Section 38(b) of such Code is amended 11 by striking ‘‘plus’’ at the end of paragraph (32), by strik- 12 ing the period at the end of paragraph (33) and inserting 13 ‘‘, plus’’, and by adding at the end the following new para- 14 graph: 15 ‘‘(34) in the case of an eligible small employer 16 (as defined in section 45U(c)), the military spouse 17 retirement plan eligibility credit determined under 18 section 45U(a).’’. 19 (c) CLERICAL AMENDMENT.—The table of sections 20 for subpart D of part IV of subchapter A of chapter 1 21 of such Code is amended by adding at the end the fol- 22 lowing new item: 23 ‘‘Sec. 45U. Military spouse retirement plan eligibility credit for small employ- ers.’’. VerDate Sep 11 2014 05:17 Apr 14, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6211 E:\BILLS\H1453.IH H1453 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 1453 IH (d) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 Æ VerDate Sep 11 2014 05:17 Apr 14, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H1453.IH H1453 pbinns on DSKJLVW7X2PROD with BILLS