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Bill

HR 8837

RISE Act

119th Congress Introduced by Brad Schneider and 3 co-sponsors

Expands incentives to spur small employer retirement plans by doubling microemployer startup credits and enabling eligible service providers to claim related credits.

Introduced in House
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WeVote Research Nonpartisan
Bill Summary · HR 8837

Overview

  • Bill: H.R. 8837
  • Session: 119th Congress
  • Title: Retirement Investment in Small Employers Act (RISE Act)
  • Purpose: To expand and reconfigure tax incentives to encourage small employer pension plan adoption and support service providers that help establish these plans.

Primary purpose and intent

  • Create a targeted tax credit structure to promote the establishment and maintenance of small employer retirement plans.
  • Provide enhanced startup incentives for microemployers and facilitate the assignment/transfer of startup credits to eligible service providers.
  • Streamline the economics of starting a small employer retirement plan by increasing the credit value and expanding who can benefit from and participate in the credits.

Key provisions and changes

1) Microemployer Pension Plan Startup Credit (Section 2)

  • Adds a new subsection (g) to Section 45E of the Internal Revenue Code.
  • Microemployer definition and enhanced startup credit:
    • For a qualified microemployer, the current 50% startup credit is increased to 100%.
    • The $500 startup credit threshold in the current statute is increased to $2,500.
    • A “qualified microemployer” is defined as an employer who would be eligible under the 408(p)(2)(C)(i)(I) test if the plan treated 10 as the applicable threshold (i.e., small scale eligibility), and whose eligible employer plan accepts the required matching contribution under Section 6433.
  • Effective date: Applies to taxable years beginning after December 31, 2026.

2) Assignment of Small Business Pension Plan Startup Credits (Section 3)

  • Adds a new subsection (h) to Section 45E.
  • Establishes a credit for eligible service providers (i.e., entities that provide services related to an eligible employer plan and help generate qualified startup costs).
  • Credit mechanics:
    • Eligible service providers can claim a tax credit for up to the first 3 credit years for a given plan, with the credit equal to what the eligible employer would have received under subsection (a) (the standard startup credit), subject to overall limits.
    • The “credit year” runs from the plan’s effective taxable year through the next two following years.
  • Qualification of eligible entities:
    • Must provide services that generate qualified startup costs and reduce fees charged to the eligible employer by at least the amount of the credit for that year.
    • Must obtain a certification before claiming the credit, including:
    • The employer’s certification detailing the number of non-highly compensated employees eligible to participate, and other information.
    • A statement that the employer and its predecessors did not maintain a similar qualified plan for the prior 3 tax years with respect to substantially the same employees.
    • Certifications that the employer will not claim the credit for the same plan in other years and has not certified to another service provider for these credits.
    • Additional information as required by the Secretary.
  • Coordination with employer credit:
    • No double credit: If an eligible employer receives a credit under subsection (a) for a plan, the same plan cannot also receive a credit under subsection (h) for the same employer.
  • Tax treatment specifics:
    • Fee reductions are not includible in gross income for the employer and are not deductible for the eligible entity.
  • Recapture:
    • If the credit received by an eligible entity exceeds what would have been allowable for the eligible employer, the excess is recaptured (added to the entity’s tax in that year).
  • Effective date: Applies to taxable years beginning after December 31, 2026.

Who is affected

  • Small and microemployers seeking to establish or maintain eligible employer plans.
  • Eligible service providers that offer plan setup, administration, or related services for such plans and who can certify eligibility and impact startup costs.
  • Employers with plans and related service providers must coordinate to ensure compliance and avoid duplicate credits.

Procedural and timeline notes

  • Introduced in the House on May 14, 2026, and referred to the Ways and Means Committee.
  • Effective dates for the new credits are set for taxable years beginning after December 31, 2026, giving a transition period before implementation.
  • The bill contemplates certification processes and regulatory guidance to be issued by the Secretary, which would govern eligibility, documentation, and administration of the credits.

Summary of potential impact

  • Increased financial incentive for microemployers to start or maintain retirement plans, potentially expanding access to employer-sponsored retirement savings.
  • Additional market for service providers that assist with small employer plans, with a structured mechanism to monetize their startup services through credits.
  • Mechanisms to ensure fidelity and prevent abuse (certifications, recapture provisions, and coordination to avoid duplicative credits).
  • Fiscal impact would depend on the number of microemployers adopting plans and the uptake by eligible service providers, as well as regulatory definitions of “qualified startup costs” and eligible entities.

Compiled from official sources — confirm details with the bill’s official record.

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