Retirement Investment in Small Employers Act

This bill, the Retirement Investment in Small Employers Act, would create a new, enhanced tax credit to help very small employers start and maintain retirement plans. Specifically, it adds a “microemployer pension plan startup credit” to the existing incentives in the Internal Revenue Code. The credit would be much larger and more generous for those microemployers (defined as employers with 10 or fewer employees) than the current small-employer credit. The key idea is to encourage tiny firms to establish retirement plans by offsetting a substantial share of their startup costs, while also requiring the plan to include a matching contribution feature funded by the employer. The credit applies to tax years beginning after December 31, 2024. Under the bill, a microemployer would receive a 100% credit on qualified startup costs (instead of 50%), up to a maximum of $2,500 (instead of $500). The microemployer definition hinges on a SIMPLE IRA eligibility test adjusted to a 10-employee threshold and requires the plan to accept employer matching contributions.