Small Nonprofit Retirement Security Act of 2025

This bill lets small tax‑exempt nonprofits use two existing federal credits to help start and run retirement plans. It makes the “startup” credit for new small‑employer retirement plans and the “auto‑enrollment” credit usable by 501(c) organizations, not just businesses. Nonprofits can apply these credits against the employer share of Social Security payroll taxes they owe, up to the amount of those payroll taxes for the year . There’s a cap so the total credit can’t be more than the employer Social Security tax due for that year . The changes apply starting with tax years that begin in 2025 .

In short, this aims to make it easier and cheaper for small nonprofits to offer retirement plans and to automatically enroll workers, by letting them use credits to reduce their payroll tax bills. The bill also directs money to the Social Security trust funds to offset the reduced tax revenue from these credits .

• Who is affected: Small 501(c) nonprofits that are exempt from federal income tax
• What changes: They can use the retirement plan startup and auto‑enrollment credits to lower their employer Social Security payroll taxes, up to the tax amount owed; total credits can’t exceed those payroll taxes
• When: Effective for tax years starting after December 31, 2024 (practically, 2025 and onward)