Legislation Offers Nonprofits the Same Access to Tax Incentives as For-Profits
Ensures Nonprofits Can “Offer Retirement Plans and Encourage Employees to Save”
WASHINGTON — Today, Congressman Vern Buchanan, Vice Chairman of the House Ways and Means Committee, introduced the bipartisan, bicameral Small Nonprofit Retirement Security Act alongside Reps. Jimmy Panetta (D-Calif), Blake Moore (R-Utah) and Brad Schneider (D-Ill.). Senators James Lankford (R-Okla.) and Catherine Cortez Masto (D-Nev.) introduced companion legislation in the Senate. The bill would help small nonprofit organizations offer 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. More Americans will be able to build financial security for the future, and nonprofits will gain another way to invest in their workforce. I’m committed to helping hardworking Americans keep more of what they earn so they can retire with peace of mind and financial independence.”
Under current law, tax-exempt organizations are ineligible for the SECURE Act’s small business retirement plan start-up credit since they do not pay federal income taxes. This creates a barrier for many nonprofits, which employ nearly 10 percent of the U.S. workforce and contribute an estimated $65 billion annually in payroll taxes. Buchanan’s Small Nonprofit Retirement Security Act would fix this by allowing nonprofits to apply these tax credits against their payroll tax liability, giving them access to the same retirement incentives already available to for-profit organizations.
Buchanan’s bill provides up to $5,000 per year in tax credits to help nonprofits launch retirement plans, plus an additional $500 annually for those that adopt automatic enrollment. To ensure nonprofits can fully benefit, the credits can be applied directly to their payroll tax liability.
“Oklahoma's nonprofits are vital to our communities, providing essential services every day. Many small nonprofits struggle to offer retirement plans due to cost and limited access. This legislation extends critical startup and auto-enrollment tax credits to nonprofits the same as for-profit businesses, allowing them to attract and retain talented employees. By supporting nonprofits in this way, we strengthen our communities,” said Senator Lankford.
“The Nevadans who have spent their entire lives giving back to their communities by working in the nonprofit sector should be able to count on stability when they retire. This bipartisan legislation will reduce the barriers that nonprofits face in creating retirement accounts for their employees, leveling the playing field between nonprofit and for-profit organizations,” said Senator Cortez Masto.
“Nonprofits offer many beneficial services for people in our communities, but that can make it difficult and expensive to offer retirement plans for their long-term employees. Our bipartisan bill would provide nonprofits with the same type of tax incentives for employee retirement plans that small businesses already receive. By helping these types of organizations start and sustain retirement plans for their workers, we can ensure that non-profits not only play an important role in the lives of their employees but also continue to play a vital role in our communities,” said Rep. Panetta.
“Small, local non-profit organizations are often on the frontlines of serving our communities. This is especially true in Utah, where the vast majority of nonprofits have fewer than 50 employees. Allowing these organizations access to the same retirement credits as small businesses will help them recruit and retain employees and ultimately continue to serve Utahns. I’m excited to work with Congressman Buchanan to introduce the Small Nonprofit Retirement Security Act of 2025 and look forward to advancing it through Congress,” said Rep. Moore.
“Small, community-based nonprofits are lifelines in our communities, providing critical services such as free meals, emergency housing, and child care assistance. These vital organizations employ ten percent of the American workforce, but, because of their tax-exempt status, they are unable to take advantage of existing incentives in our tax code that help private employers offer retirement plans for their employees. I’m proud to join my colleagues to help small charities build out their retirement plans and help the workers who serve our communities plan for a comfortable retirement,” said Rep. Schneider.
The legislation is supported by the American Retirement Association.
“One out of 10 U.S. workers is employed by a nonprofit organization. Most of them are smaller and do not offer a retirement plan. This legislation will ensure that nonprofits have access to the same tax incentives for starting up a retirement plan that were provided to for-profit small businesses in SECURE 2.0. The ARA applauds Senators Lankford and Cortez Masto, and Representatives Buchanan, Panetta, Moore and Schneider for their bipartisan leadership on this issue,” said Brian Graff, CEO, American Retirement Association.
Buchanan is a well-respected leader in Florida’s business community and has created thousands of jobs during his career in business. He previously chaired both the Florida Chamber of Commerce and the Sarasota Chamber of Commerce, and he served as a member of the Board of the U.S. Chamber. In 2005, he was inducted into the Tampa Bay Business Hall of Fame. Buchanan currently serves as Vice Chairman on the powerful U.S. House Ways and Means Committee, which has broad jurisdiction over taxes and has championed pro-growth tax incentives for small businesses in the “One Big, Beautiful Bill.”
###
