period with respect to such failure. (2) Noncompliance period For purposes of this section, the term noncompliance period means, with respect to any failure, the period— (A) beginning on the date such failure first occurs, and (B) ending on the earlier of— (i) the date such failure is corrected, or (ii) with respect to any employer, the date that is 3 months after the last date on which the employee is required to be eligible to participate in an automatic contribution plan or arrangement maintained or facilitated by such employer. (3) Adjustment for inflation (A) In general In the case of any failure relating to maintaining or facilitating a plan or arrangement in a calendar year beginning after 2026, the $10 amount under paragraph (1) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof. (B) Rounding If any amount adjusted under subparagraph (A) is not a whole dollar amount, such amount shall be rounded to the nearest whole dollar amount. (c) Limitations on amount of tax (1) Tax not to apply where failure not discovered exercising reasonable diligence No tax shall be imposed by subsection (a) on any failure during any period for which it is established to the satisfaction of the Secretary that none of the persons referred to in subsection (e) knew, nor exercising reasonable diligence would have known, that such failure existed. (2) Tax not to apply to failures corrected within 9 ½ months No tax shall be imposed by subsection (a) on any failure if— (A) such failure was due to reasonable cause and not to willful neglect, and (B) such failure is corrected during the 9 ½ -month period beginning on the first date any of the persons referred to in subsection (e) knew that such failure existed, or exercising reasonable diligence would have known. (3) Overall limitation for unintentional failures In the case of