H.R. 9792: Employee Ownership Fairness Act of 2026

This bill would change federal retirement law for ESOPs, which are plans that give workers ownership shares in their company. Its main effect is to let employees in ESOPs keep more of the retirement tax benefits from their company stock ownership while still being able to use a separate defined contribution plan, such as a 401(k), without running into certain IRS limits as quickly.

What the bill changes

• It would create special rules for ESOPs under federal tax and retirement law.
• When calculating certain annual contribution limits, the bill would exclude:
  • contributions made in employer stock, and
  • contributions used to repay loans taken out to buy employer stock.
• It would require the contribution limits for an ESOP to be calculated separately from any other defined contribution plan the employer offers, such as a 401(k).
• It would also say that, for limit purposes, shares or money that are forfeited and then allocated to ESOP accounts would not count as annual additions.

Practical effect

Under current law, workers in companies with ESOPs can sometimes hit annual IRS limits because the value of company stock added to their ESOP counts toward those limits. That can reduce how much they can contribute to a 401(k)-style plan or how much employer matching they can receive. This bill would ease that problem by treating ESOP stock contributions differently from other retirement plan contributions.

In simple terms, the bill is intended to make it easier for employees who already gain ownership through an ESOP to also save more in a regular retirement account offered by their employer.

When it would take effect

The new rules would apply to plan years that begin after the date the bill is enacted.

Relevant Companies

• AAPL — None found