House lawmakers have introduced a bipartisan bill to incentivize micro-businesses with fewer than 10 employees to launch retirement plans.
The Retirement Investment in Small Employers Act, or RISE Act, would expand a provision in SECURE 2.0, the comprehensive retirement security package that Congress passed in December, that provides tax credits for small businesses adopting a retirement plan.
For small businesses with fewer than 50 employees, SECURE 2.0 allows for 100% of retirement plan administrative and startup costs to be covered for new plans, up to $5,000 per year.
However, the law did not amend the formula relied upon to determine the amount an employer may claim in retirement plan startup tax credits, leaving the smallest micro-businesses and their employees unable to take full advantage of the credit, according to a news release from Rep. Claudia Tenney, R-N.Y., who introduced the bill on Oct. 19 with Rep. Dan Kildee, D-Mich.
The RISE Act would fix the issue.
"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," Tenney said in the news release.