Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation

Forms and Documents

Forms and supporting documents for this ICR

Document	Type	Status	Availability
Form Form 8881 Credit for Small Employer Pension Plan Startup Costs	Form	Modified	Repair queued
Form Form 8881 Form 8881--Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation	Form	Modified	Repair queued
SUP STAT (Form 8881)-clean.docx	Supporting Statement A	Uploaded 2024-02-21	Repair queued

IC Document Collections

Information collection document groups

IC ID	Collection	Type	Status	Form
19420	Form 8881--Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation	Form	Modified	Credit for Small Employer Pension Plan Startup Costs
19420	Form 8881--Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation	Form	Modified
19420	Form 8881--Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation	Instruction	Modified

ICR Details

OMB Control No: 1545-1810	ICR Reference No: 202402-1545-010
Status: Active	Previous ICR Reference No: 202201-1545-009
Agency/Subagency: TREAS/IRS	Agency Tracking No:
Title: Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation
Type of Information Collection: Revision of a currently approved collection	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Approved without change	Conclusion Date: 04/15/2024
Retrieve Notice of Action (NOA)	Date Received in OIRA: 02/29/2024
Terms of Clearance:

table that charts list comparision

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	04/30/2027	36 Months From Approved	06/30/2025
Responses	66,667	0	66,667
Time Burden (Hours)	575,336	0	316,002
Cost Burden (Dollars)	0	0	0

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Abstract: Qualified small employers use Form 8881 to request a credit for start up costs related to eligible retirement plans. Form 8881 implements section 45E, which provides a credit based on costs incurred by an employer in establishing or administering an eligible employer plan or for the retirement related education of employees with respect to the plan. The credit is 50% of the qualified costs for the tax year, up to a maximum credit of $500 for the first tax year and each of the two subsequent tax years. The Secure 2.0 Act of 2022 added new IRC section 45AA, Military Spouse Retirement Plan Eligibility Credit for Small Employers. Section 45AA provides a general business tax credit to eligible small employers who offer defined contribution plans with specific features that benefit military spouses. The section 45AA credit is, for a tax year during which a military spouse participates in the plan, up to 3 tax years beginning with the tax year during which the military spouse began participating in the plan, $200, plus the amount of employer contributions (other than elective deferrals) made on behalf of the military spouse for any of the 3 tax years, up to $300 for a tax year. The Form 8881 is being revised to add the Section 45AA credit. Additionally, the Secure 2.0 Act amended section 45E to permit eligible employers, with 1–50 employees, an increased start-up costs credit of 100% of the qualified start-up costs for a tax year, up to $500 for the tax year in which the plan is established or becomes effective and each of the two subsequent tax years. The Secure 2.0 Act also amended section 45E to permit an additional credit for employer contributions by certain eligible employers, in an amount equal to an applicable percentage of eligible employer contributions to a defined contribution plan, for up to 5 tax years beginning with the tax year in which the plan is established. The Form 8881 is being revised to include these additions under section 45E.

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Authorizing Statute(s): PL: Pub.L. 107 - 16 619 (a) Name of Law: Economic Growth and Tax Relief Reconciliation Act of 2001
   PL: Pub.L. 116 - 94 104 and 105 Name of Law: Further Consolidated Appropriations Act, 2020
   US Code: 26 USC 45E Name of Law: Small employer pension plan startup costs
   US Code: 26 USC 45T Name of Law: Auto-enrollment option for retirement savings options provided by small employers
   US Code: 26 USC 45AA Name of Law: Military Spouse Retirement Plan Eligibility Credit for Small Employers
  

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
	Not associated with rulemaking

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Federal Register Notices & Comments
60-day Notice:	Federal Register Citation:	Citation Date:
	88 FR 78472	11/15/2023
30-day Notice:	Federal Register Citation:	Citation Date:
	89 FR 14738	02/29/2024
Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 1

table that charts list of burden

IC Title	Form No.	Form Name
Form 8881--Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation	Form 8881	Credit for Small Employer Pension Plan Startup Costs

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ICR Summary of Burden

table that charts list of burden

	Total Approved	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	66,667	66,667	0	0	0	0
Annual Time Burden (Hours)	575,336	316,002	0	259,334	0	0
Annual Cost Burden (Dollars)	0	0	0	0	0	0

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Miscellaneous Actions

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: The Secure 2.0 Act of 2022 added new IRC section 45AA, Military Spouse Retirement Plan Eligibility Credit for Small Employers. Section 45AA provides a general business tax credit to eligible small employers who offer defined contribution plans with specific features that benefit military spouses. The section 45AA credit is, for a tax year during which a military spouse participates in the plan, up to 3 tax years beginning with the tax year during which the military spouse began participating in the plan, $200, plus the amount of employer contributions (other than elective deferrals) made on behalf of the military spouse for any of the 3 tax years, up to $300 for a tax year. The Form 8881 is being revised to add the Section 45AA credit. Additionally, the Secure 2.0 Act amended section 45E to permit eligible employers, with 1–50 employees, an increased start-up costs credit of 100% of the qualified start-up costs for a tax year, up to $500 for the tax year in which the plan is established or becomes effective in each of the two subsequent tax years. The Secure 2.0 Act also amended section 45E to permit an additional credit for employer contributions by certain eligible employers, in an amount equal to an applicable percentage of eligible employer contributions to a defined contribution plan, for up to 5 tax years beginning with the tax year in which the plan is established. The Form 8881 is being revised to include these additions under section 45E.

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Annual Cost to Federal Government: $22,499

Does this IC contain surveys, censuses, or employ statistical methods? No

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     Yes

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? No

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Common Form ICR:  No

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On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 02/29/2024

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