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Internal Revenue Code · 26 U.S.C.

§ 45AA. Military spouse retirement plan eligibility credit for small employers

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 45AA

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Added
December 29, 2022 by Pub. L. 117–328
Length
6 subsections · 562 words · about 2 min to read
Defines
4 terms
Cross-references
cites 5; cited by 2 Code sections and 0 other regulations
(a) In general For purposes of section 38, in the case of any eligible small employer, the military spouse retirement plan eligibility credit determined under this section for any taxable year is an amount equal to the sum of—
(1) $200 with respect to each military spouse who is an employee of such employer and who participates in an eligible defined contribution plan of such employer at any time during such taxable year, plus
(2) so much of the contributions made by such employer (other than an elective deferral (as defined in section 402(g)(3)) 11 So in original. Probably should be followed by another closing parenthesis. to all such plans with respect to such employee during such taxable year as do not exceed $300.
(b) Limitation

An individual shall only be taken into account as a military spouse under subsection (a) for the taxable year which includes the date on which such individual began participating in the eligible defined contribution plan of the employer and the 2 succeeding taxable years.

(c) Eligible small employer

For purposes of this section, the term “eligible small employer” means an eligible employer (as defined in section 408(p)(2)(C)(i)(I).22 So in original. Another closing parenthesis probably should precede the period.

(d) Military spouse For purposes of this section—
(1) In general

The term “military spouse” means, with respect to any employer, any individual who is married (within the meaning of section 7703 as of the first date that the employee is employed by the employer) to an individual who is a member of the uniformed services (as defined section 101(a)(5) of title 10, United States Code) serving on active duty. For purposes of this section, an employer may rely on an employee’s certification that such employee’s spouse is a member of the uniformed services if such certification provides the name, rank, and service branch of such spouse.

(2) Exclusion of highly compensated employees

With respect to any employer, the term “military spouse” shall not include any individual if such individual is a highly compensated employee of such employer (within the meaning of section 414(q)).

(e) Eligible defined contribution plan For purposes of this section, the term “eligible defined contribution plan” means, with respect to any eligible small employer, any defined contribution plan (as defined in section 414(i)) of such employer if, under the terms of such plan—
(1) military spouses employed by such employer are eligible to participate in such plan not later than the date which is 2 months after the date on which such individual begins employment with such employer, and
(2) military spouses who are eligible to participate in such plan—
(A) are immediately eligible to receive an amount of employer contributions under such plan which is not less the amount of such contributions that a similarly situated participant who is not a military spouse would be eligible to receive under such plan after 2 years of service, and
(B) immediately have a nonforfeitable right to the employee’s accrued benefit derived from employer contributions under such plan.
(f) Aggregation rule

All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer for purposes of this section.

(Added Pub. L. 117–328, div. T, title I, § 112(a), Dec. 29, 2022, 136 Stat. 5294.)

Terms defined here

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Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 5 other sections

Cited by 2 Code sections

Amendment history

From the source credit and the official notes, newest first.

  1. Added by Pub. L. 117–328

Where it sits in the Code

  1. Subtitle A Income Taxes
  2. Chapter 1 NORMAL TAXES AND SURTAXES
  3. Subchapter A Determination of Tax Liability
  4. Part IV CREDITS AGAINST TAX
  5. Subpart D Business Related Credits

Nearby sections

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to taxable years beginning after Dec. 29, 2022, see section 112(e) of Pub. L. 117–328, set out as an Effective Date of 2022 Amendment note under section 38 of this title.