Credit for minimum employer contributions

(a) In general Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 45BB. Credit for minimum employer contributions (a) General rule For purposes of section 38, the minimum employer contribution credit determined under this section for any taxable year is an amount equal to the applicable percentage of the qualified retirement contributions paid or incurred by the taxpayer during the taxable year. (b) Applicable percentage For purposes of subsection (a), the applicable percentage is— (1) 50 percent, in the case of contributions made with respect to not more than 15 employees of the employer (or the number of employees of the employer which is the equivalent of 15 full-time employees), and (2) 25 percent, in the case of contributions made with respect to so many of the employees of the employer (or the equivalent of so many full-time employees) as exceeds 15 but does not exceed 30. (c) Qualified retirement contributions For purposes of this section— (1) In general The term qualified retirement contributions means— (A) contributions made by an employer as required under section 802 of the Employee Retirement Income Security Act of 1974, and (B) contributions to a plan described in section 802(b)(2) of such Act made by an employer which is not subject to the requirement of section 802(a)(1) of such Act. (2) Only required contribution amount taken into account The term qualified retirement contributions does not include any amount in excess of— (A) the amount determined under section 802(a)(2) of the Employee Retirement Income Security Act with respect to each employee of the employer, or (B) the amount which would be so determined if the employer were subject to the requirement of section 802(a)(1) of such Act. (d) Employers excluded for failure To make contributions Subsection (a) shall not apply to any employer which fails, within the time prescribed by the Secretary, to make any contribution required to be made by such employer under section 802 of the Employee Retirement Income Security Act of 1974 for the taxable year or any of the 4 taxable years preceding such year. (e) Special rules For purposes of this section— (1) Aggregation rules, etc Rules similar to the rules of section 45E(e) shall apply. (2) Denial of double benefit No credit shall be allowed under this section for any taxable year in which the credit under section 45E is allowed with respect to the taxpayer. (f) Credit made available to tax-Exempt eligible employers (1) In general In the case of a tax-exempt eligible employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of— (A) the amount of the credit determined under this section with respect to such employer, or (B) the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins. (2) Tax-exempt eligible employer For purposes of this section, the term tax-exempt eligible employer means an eligible employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a). (3) Payroll taxes For purposes of this subsection— (A) In general The term payroll taxes means— (i) amounts required to be withheld from the employees of the tax-exempt eligible employer under section 3401(a), (ii) amounts required to be withheld from such employees under section 3101(b), and (iii) amounts of the taxes imposed on the tax-exempt eligible employer under section 3111(b). (B) Special rule A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A).. (b) Credit To be made part of business credit Subsection (b) of section 38 of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting, plus, and by adding at the end the following new paragraph: (42) in the case of an eligible employer, the minimum employer contribution credit determined under section 45BB(a).. (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 45BB. Credit for minimum employer contributions.. (d) Transfers to Federal Old-Age and Survivors Insurance Trust Fund There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the enactment of section 45AA(f) of the Internal Revenue Code of 1986. Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted. (e) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.