ALLOW ADDITIONAL NONELECTIVE CONTRIBUTIONS TO SIMPLE PLANS.

SEC. 116. ALLOW ADDITIONAL NONELECTIVE CONTRIBUTIONS TO SIMPLE PLANS.(a) In General.—(1) Modification to definition.—Subparagraph (A) of section 408(p)(2) is amended by striking “and” at the end of clause (iii), by redesignating clause (iv) as clause (v), and by inserting after clause (iii) the following new clause:“(iv) the employer may make nonelective contributions of a uniform percentage (up to 10 percent) of compensation for each employee who is eligible to participate in the arrangement, and who has at least $5,000 of compensation from the employer for the year, but such contributions with respect to any employee shall not exceed $5,000 for the year, and” . (2) Limitation.—Subparagraph (A) of section 408(p)(2) is amended by adding at the end the following: “The compensation taken into account under clause (iv) for any year shall not exceed the limitation in effect for such year under section 401(a)(17).”. (3) Overall dollar limit on contributions.—Paragraph (8) of section 408(p) is amended to read as follows:“(8) Coordination with maximum limitation.—In the case of any simple retirement account—“(A) subsection (a)(1) shall be applied by substituting for ‘the amount in effect for such taxable year under section 219(b)(1)(A)’ the following: ‘the sum of the dollar amount in effect under subsection (p)(2)(A)(ii), the employer contribution required under subsection (p)(2)(A)(iii) or (p)(2)(B)(i), whichever is applicable, and a contribution which meets the requirement of subsection (p)(2)(A)(iv) with respect to the employee’, and “(B) subsection (b)(2)(B) shall be applied by substituting for ‘the dollar amount in effect under section 219(b)(1)(A)’ the following: ‘the sum of the dollar amount in effect under subsection (p)(2)(A)(ii), the employer contribution required under subsection (p)(2)(A)(iii) or (p)(2)(B)(i), whichever is applicable, and a contribution which meets the requirement of subsection (p)(2)(A)(iv) with respect to the employee’.” . (4) Adjustment for inflation.—Paragraph (2) of section 408(p), as amended by this Act, is further amended by adding at the end the following new subparagraph:“(G) Adjustment for inflation.—In the case of taxable years beginning after December 31, 2024, the $5,000 amount in subparagraph (A)(iv)(II) shall be increased by an amount equal to—“(i) such amount, multiplied by “(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘2023’ for ‘2016’ in subparagraph (A)(ii) thereof. If any amount as adjusted under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100.” . (b) Conforming Amendments.—136 STAT. 5299 (1) Section 408(p)(2)(A)(v), as redesignated by subsection (a), is amended by striking “or (iii)” and inserting “, (iii), or (iv)”. (2) Section 401(k)(11)(B)(i) is amended by striking “and” at the end of subclause (II), by redesignating subclause (III) as subclause (IV), and by inserting after subclause (II) the following new subclause:“(III) the employer may make nonelective contributions of a uniform percentage (up to 10 percent) of compensation, but not to exceed the amount in effect under section 408(p)(2)(A)(iv) in any year, for each employee who is eligible to participate in the arrangement and who has at least $5,000 of compensation from the employer for the year, and” . (3) Section 401(k)(11)(B)(i)(IV), as redesignated by paragraph (2), is amended by striking “or (II)” and inserting “, (II), or (III)”. (c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2023.