S. 1840 · Where this bill is now
In committee
Introduced in the Senate, May 21, 2025
What this bill does
In plain words · AI-written from the official summaryBoosts tax credit for small employer retirement plans
Small businesses with 10 or fewer employees can currently get a federal tax credit to help pay for starting a retirement plan, with a limit of $500 or $5,000 depending on how many workers they have. This bill increases that limit to at least $2,500 for these tiny employers, as long as the retirement plan they set up participates in a federal program called the Saver's Match that will help workers save money starting in 2027.
How it affects you
If you own a very small business with 10 or fewer employees, this could make it cheaper for you to start a retirement plan by increasing the tax credit you can claim. For workers at those small businesses, having a retirement plan available means more options to save for the future, and the Saver's Match program could add federal matching contributions to their accounts.
Read the official summary (Introduced in Senate, May 21, 2025)
Retirement Investment in Small Employers Act
This bill increases the federal tax credit limit for startup costs incurred by certain small businesses to establish a qualified retirement plan.
As background, a federal tax credit is allowed for 50% of the costs incurred by a small business with no more than 100 qualified employees (or 100% of such costs for a small business with no more than 50 qualified employees) to establish a qualified retirement plan. Under current law, the tax credit is limited to the greater of (1) $500, or (2) the lesser of $250 per eligible employee or $5,000. (Additional limits may apply.)
The bill increases the limit on the tax credit for retirement plan startup costs for employers with no more than 10 employees to the greater of (1) $2,500, or (2) the lesser of $250 per employee or $5,000.
For the increased tax credit limit to apply, the retirement plan established by the business must accept payment of the matching contribution under the Saver’s Match program. Under the Saver's Match program, beginning in 2027, individuals that meet certain requirements are eligible to have a federal matching contribution of up to $1,000 (or $2,000 for married joint filers) deposited into a qualified retirement account.
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionS. 1840
A BILL
Retirement Investment in Small Employers Act
Sponsor: Sen. Margaret Wood Hassan (D-NH) · Introduced May 21, 2025 · Taxation · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action May 21, 2025: “Read twice and referred to the Committee on Finance.”