WASHINGTON, D.C. – U.S. Rep. Blake Moore has joined congressional efforts to introduce bipartisan, bicameral legislation to help small non-profit groups to offer retirement plans.
The Small Non-profit Retirement Security Act would extend federal tax incentives for retirement plans that are currently available only to for-profit employers, according to Moore.
“Small, local non-profits organizations are often on the front lines of serving our communities,” he explains. “This is especially true in Utah, where the vast majority of non-profits have fewer than 50 employees.”
Since 2020, the Setting Every Community Up for Retirement Enhancement Act – also known as the SECURE Act – has functioned to improve retirement savings options for Americans. Under that law, the required minimum distribution age was raised and rules for inherited retirement accounts were modified.
But tax-exempt organizations are currently ineligible for the SECURE Act’s small business retirement plan start-up credit since they do not pay federal income tax.
Moore’s staffers here in Washington say that catch creates a retirement barrier for many non-profits, which employ nearly 10 percent of U.S. workforce and contribute an estimated $65 billion annually in payroll taxes.
The Small Business Non-profit Retirement Security Act would eliminate this problem, they emphasize, by allowing non-profits to apply these tax credits against their payroll tax liability, giving them access to the same retirement incentives already available to for-profit organizations.
Specifically, the proposed legislation would provide up to $5,000 per year in tax credits to help non-profits launch their own retirement plans, plus an additional $500 annually for those that adopt automatic enrollment. To ensure that non-profits can fully benefit, the credits can be applied directly to their payroll tax liability.
“Allowing these organization access to the same retirement credits as small businesses will help them recruit and retain employees and ultimately continue to serve Utahns,” Moore argues.
Representatives Vern Buchanan (R-FL), Jimmy Panetta (D-CA) and Brad Schneider (D-IL) have joined Moore in co-sponsoring this legislation and Senators James Lankford (R-OK) and Catherine Cortez Masto (D-NV) have introduced companion legislation in the Senate.
The Small Non-profit Retirement Security Act is also support by the American Retirement Association.