A bipartisan group of House lawmakers has reintroduced the Retirement Investment in Small Employers (RISE) Act, a bill targeting the roughly 5.5 percent of eligible firms that actually claim the federal startup tax credit for retirement plans; a figure drawn from a 2025 working paper by the National Bureau of Economic Research. The legislation focuses specifically on businesses with fewer than 10 employees, a segment largely left behind by the retirement plan incentives expanded under SECURE 2.0.
The bill’s central structural change is designed to remove the administrative friction that discourages the smallest employers from setting up plans in the first place. Rather than requiring the business owner to claim the startup tax credit directly, the RISE Act would allow service providers to apply the credit against their fees, shifting the paperwork burden entirely away from the plan sponsor.
What the RISE Act would cover and how the credit mechanism works
Under current law, SECURE 2.0 offers startup tax credits covering administrative costs for small businesses with fewer than 50 employees, and eligible firms can claim the credit for up to three years. The NBER working paper found that most businesses claiming the credit do so for only one year, despite that multi-year eligibility window – a pattern consistent with findings from the Bipartisan Policy Center, which has cited complexity and lack of awareness as the primary barriers to utilization.
The RISE Act addresses this by restructuring who interacts with the credit. By allowing retirement plan service providers to be charged for the credit rather than the employer, the bill eliminates the requirement that a small business owner navigate plan setup decisions, compliance requirements, and payroll integration before seeing any financial offset. A companion Senate version introduced in May 2025 by Sens. Maggie Hassan and Ted Budd included a specific dollar-floor fix – raising the minimum startup tax credit from $500 to $2,500 for employers with fewer than 10 workers – making the benefit more meaningful for the smallest firms.
Why the bill is back and what drove the renewed push
The RISE Act’s reintroduction reflects persistent evidence that, despite their expanded scope, SECURE 2.0’s retirement plan incentives have not moved the needle for micro-businesses. Congresswoman Claudia Tenney (R-NY) led the House reintroduction alongside Representatives Brad Schneider (D-IL), Adrian Smith (R-NE), and Linda Sánchez (D-CA) – a bipartisan coalition spanning both chambers’ earlier versions of the legislation.
Schneider framed the renewed effort around the workforce coverage gap: small businesses employ nearly half of America’s workers, yet many of those employees remain without access to employer-sponsored retirement plans. The American Retirement Association, whose CEO Brian Graff described the bill as “a smart, targeted approach to expanding retirement coverage,” has backed the legislation as a practical fix rather than a structural overhaul of the existing credit program.
What the bill means for employers with fewer than 10 workers
For a qualifying micro-business owner, the operative change under the RISE Act is procedural: instead of fronting the cost of setting up a retirement plan and then filing to recover it through a tax credit, the employer would work with a service provider who applies the credit directly – reducing the out-of-pocket friction that researchers and industry groups say discourages plan adoption. Businesses that have avoided offering retirement benefits specifically because of setup complexity or upfront cost are the intended beneficiaries.
The credit structure under SECURE 2.0 already covers administrative costs for the first three years of a new plan, but the NBER data makes clear that few micro-businesses reach that threshold. Small business tax compliance carries its own risks separate from retirement plan credits – the IRS flagged three major small business tax risks in its 2026 Dirty Dozen list – and adding retirement plan paperwork to that load has been enough to deter many owners from starting a plan at all. The RISE Act’s fee-assignment mechanism is designed to remove that layer without requiring legislative changes to the underlying credit amounts.
Where the bill stands now and what comes next
The House bill has been referred to the Ways and Means Committee, where it awaits a hearing or markup. The Senate version, introduced in May 2025, provides the effort with a legislative template in both chambers, but movement in either chamber will depend on committee scheduling and whether retirement-industry advocacy groups sustain pressure through the current session.