Tax Incentive for Microbusinesses to Start Retirement Plans

The Retirement Investment in Small Employers (RISE) Act (S. 1840) would allow businesses with 10 or fewer employees to claim a tax credit of 100% of retirement plan startup costs up to $5,000. This is a bipartisan bill, which is supported by a number of business organizations, that would essentially expand to microbusinesses an existing credit opportunity for starting a qualified retirement plan. The new twist: the service provider (the company managing the plan for the business) would be able to use the tax credit as payment for services. This means the business would not have to lay out funds for startup costs and then wait to file a return to recoup them via the tax credit. #IdeaoftheDay