H.R. 3308: Retaining Educators Takes Added Investment Now Act

This bill, known as the Retaining Educators Takes Added Investment Now Act (RETAIN Act), aims to address the shortage of qualified teachers and school leaders in early childhood, elementary, and secondary education settings through a tax incentive program. The key components of the bill are as follows:

Purpose of the Bill

The RETAIN Act introduces a refundable tax credit that rewards early childhood educators, teachers, education program directors, school leaders, and school-based mental health service providers for their retention in schools that serve high-need students.

Background Findings

• The shortage of experienced educators in the U.S. negatively affects student outcomes.
• This shortage arises from factors such as low salaries, frequent changes in school leadership, poor working conditions, and insufficient support for teachers.
• The issue is particularly severe in high-poverty areas and disproportionately affects teachers of color.
• High-quality early childhood education is critical for children's future learning and development.
• As of 2021, many early childhood educators were paid significantly less than the median income required for self-sufficiency, with many relying on government assistance.
• Data indicates that experienced teachers directly contribute to improved academic performance and success for students.

Provisions of the Tax Credit

The bill proposes the following tax credit structure based on the continuous years of employment:

• For the first and second school years: $5,800 for each year.
• For the third and fourth school years: $7,000 for each year.
• For the fifth to ninth school years: $8,700 for each year.
• For the tenth school year: $11,600.
• After the tenth year: $8,700 for the eleventh to fifteenth years and $5,800 for the sixteenth to twentieth years.

Commitments and Restrictions

State and local educational agencies are prohibited from reducing compensation or benefits for employees who qualify for the tax credit. They must ensure that the funding stays intact irrespective of the tax credit's introduction.

Information Sharing

The Department of Education and the Department of Health and Human Services are required to collaborate in sharing necessary information to determine compliance with qualifying standards for schools and early childhood programs.

Data Series Development

The Secretary of Labor, in coordination with other relevant departments, is tasked with creating a publicly accessible data series that tracks teacher salaries and educational demographics.

Effective Date

This bill will apply to taxable years that begin after December 31, 2025.

Relevant Companies

None found