Small Nonprofit Retirement Security Act of 2025

This bill helps small nonprofit employers offer retirement plans. It lets them use two existing tax credits—one to help start a plan and one for auto-enrolling workers—even though they don’t pay income taxes. Instead, these credits reduce the employer’s payroll taxes, up to the amount of payroll tax they owe for that year. Nonprofits that qualify are those with 501(c) status that are tax-exempt.

It also says the total credit in a year can’t be more than the employer’s total payroll tax for that year. Any reduction to federal revenue from these credits is made up by transfers to the Social Security trust funds, so those funds aren’t shorted.

• Who is affected: Tax‑exempt small employers, such as 501(c) nonprofits.
• What changes: They can use the retirement plan startup credit and the auto‑enrollment credit to lower their payroll taxes, but only up to what they owe in payroll tax for the year.
• When: Applies to tax years starting after December 31, 2024.