Small Nonprofit Retirement Security Act of 2025

This bill, known as the "Small Nonprofit Retirement Security Act of 2025," aims to expand access to retirement benefits for employees of tax-exempt organizations. It achieves this by making two existing federal tax credits available to eligible tax-exempt small employers : the credit for small employer pension plan startup costs and the retirement auto-enrollment credit. These credits are designed to incentivize small businesses to establish and maintain retirement plans. Under the proposed changes, tax-exempt employers, defined as those described in section 501(c) and exempt under section 501(a), can claim these credits against their payroll tax obligations , specifically the employer's share of Social Security tax. The amount of the credit is limited to the payroll tax paid by the employer during the relevant calendar year. The amendments will apply to taxable years beginning after December 31, 2024, and include provisions for transferring funds to Social Security Trust Funds to offset any revenue reductions.