This bill, called the Retirement Investment in Small Employers (RISE) Act, changes the tax credit rules for starting employer retirement plans. It adds a new credit for "microemployers" that increases the credit rate from 50% to 100% and raises a per-employee limit from $500 to $2,500. It defines a "qualified microemployer" by applying a 10-for-100 substitution in a cross-referenced tax code provision and requires the employer’s plan to accept certain matching contribution payments. The change applies to taxable years beginning after December 31, 2026.
The bill also lets certain service providers (called "eligible entities") claim the startup credit instead of the employer for up to three credit years. To claim the credit, the service provider must generate qualified startup costs for the plan, reduce the fees charged to the employer by at least the credit amount, and obtain a written employer certification before providing services. The employer certification must state the number of non-highly-compensated employees eligible for the plan and confirm the employer is not claiming the startup credit. The fee reduction is not taxable income to the employer and is not deductible by the service provider. If a service provider receives more than the credit amount that would have been available to the employer, the excess is taxed (recapture). This part also takes effect for taxable years beginning after December 31, 2026.
No publicly available information on estimated federal costs or revenue effects is included in the bill text or metadata.
The sponsors introduced the bill to provide a larger startup credit for very small employers and to allow assignment of small-employer startup credits to service providers. The bill’s text shows the goal is to make it easier for microemployers to establish retirement plans and to let service providers reduce employer fees in exchange for claiming the credit.
No publicly available information.