Small Nonprofit Retirement Security Act of 2025

This legislation aims to expand access to federal tax credits for establishing and maintaining retirement plans by extending them to eligible tax-exempt organizations. It specifically makes the existing credit for small employer pension plan startup costs and the retirement auto-enrollment credit available to these entities. Under the bill, tax-exempt eligible employers, defined as those described in section 501(c) and exempt from taxation under section 501(a), can claim these credits. Instead of reducing income tax, these credits will be applied against the employer's share of payroll tax , specifically the tax imposed by section 3111(a), up to the amount of payroll tax paid. This change is intended to incentivize more nonprofit organizations to offer retirement savings options to their employees. The amendments will apply to taxable years beginning after December 31, 2024. To ensure the stability of Social Security trust funds, the bill also mandates appropriations from the general fund to offset any revenue reductions resulting from these new credits.