Today, Congressman Vern Buchanan, Vice Chairman of the House Ways and Means Committee, introduced the bipartisan Small Nonprofit Retirement Security Act. He was joined by Reps. Jimmy Panetta (D-Calif), Blake Moore (R-Utah), and Dan Schneider (D-Ill.) in the House. Senators James Lankford (R-Okla.) and Catherine Cortez Masto (D-Nev.) introduced companion legislation in the Senate. The bill aims to assist small nonprofit organizations in offering retirement plans by extending federal tax incentives currently available only to for-profit employers.
“Every American deserves the opportunity to save for retirement, including the millions who are dedicating their lives to charitable work,” said Buchanan. “My commonsense bill supports nonprofits by giving them the same tools as small for-profit businesses to offer retirement plans to their employees.”
Under current law, tax-exempt organizations cannot benefit from the SECURE Act’s small business retirement plan start-up credit due to their non-tax-paying status. Buchanan’s bill would address this issue by allowing nonprofits to apply these tax credits against their payroll tax liability.
Buchanan’s proposal includes up to $5,000 per year in tax credits for nonprofits starting retirement plans and an additional $500 annually for those adopting automatic enrollment. These credits can be directly applied to payroll tax liabilities.
“Oklahoma’s nonprofits are vital to our communities,” stated Senator Lankford. “This legislation extends critical startup and auto-enrollment tax credits.”
Senator Cortez Masto added, “The Nevadans who have spent their entire lives giving back… should be able to count on stability when they retire.”
Rep. Panetta emphasized that nonprofits face challenges offering retirement plans due to costs: “Our bipartisan bill would provide nonprofits with the same type of tax incentives.”
Rep. Moore noted that many Utah nonprofits have fewer than 50 employees: “Allowing these organizations access… will help them recruit and retain employees.”
Rep. Schneider remarked on community-based nonprofits providing essential services: “These vital organizations employ ten percent of the American workforce.”
The legislation is supported by the American Retirement Association, whose CEO Brian Graff said it ensures that “nonprofits have access to the same tax incentives… provided to for-profit small businesses.”
Buchanan has a significant background in Florida’s business community and serves as Vice Chairman on the U.S. House Ways and Means Committee.
