A newly introduced bill would allow micro-sized businesses to enact full retirement plan startup tax credits and benefits originally offered in SECURE 2.0 legislation.
The Retirement Investment in Small Employers (RISE) Act, introduced by Reps. Claudia Tenney (R-NY) and Dan Kildee (D-MI), would incentivize businesses with one to nine employees to adopt retirement plans while correcting a previous issue noted in SECURE 2.0 legislation. It would increase the minimum allowable tax credit from $500 to $2,500 and would require employers to offer the Saver’s Match to workers if they wanted to receive the credit.
“Congress must empower and reaffirm our commitment to small businesses across the country by taking steps to grant them a competitive edge in our economy,” said Congresswoman Tenney, in a statement. “I introduced the Retirement Investment in Small Employers Act along with Congressman Kildee today to enable micro-businesses across NY-24 and the nation to offer their employees robust retirement plans and allow their employees to save for the future. I remain committed to advocating for tax policies that work in favor of our small businesses and hardworking families.”
SECURE 2.0 had initially offered retirement plan startup tax credits for small businesses with fewer than 50 employees and also covered up to $5,000 in administrative and startup costs for new plans. However, the legislation did not amend a per-employee formula that determined how much employers can claim in retirement startup tax credits, and therefore left micro-businesses incapable of taking advantage of the credit.
With the RISE Act, Reps. Tenney Kildee are advocating for an increase in the minimum allowable startup tax credit to ensure that micro-sized businesses can fully benefit from the tax incentives granted to small businesses under SECURE Act 2.0, said Paychex in a statement supporting the bill.
Congress will likely consider technical corrections to SECURE 2.0 in 2024, adds Paychex, where it’s possible the RISE Act will be deliberated, as well.
“All businesses, regardless of size, deserve the same opportunity and access to tax credits to help offset the costs of offering a retirement plan to their employees,” said Michael Majors, Paychex vice president of Human Resource (HR) Solutions. “Paychex is proud to endorse the RISE Act to expand tax credits for micro-sized businesses, which provides a clearer pathway for more of the smallest businesses to offer retirement plans and helps to solve the country’s retirement crisis.”
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