This bill aims to enhance retirement savings for Rhode Island workers by establishing tax credits for small employers who create and maintain employer-sponsored retirement plans. The General Assembly recognizes that many workers lack access to such plans, particularly in small businesses, and seeks to alleviate the financial and administrative burdens faced by these employers. The proposed legislation introduces a new chapter in the taxation laws, titled "Employer Tax Credits for Retirement Plan Establishment, Participation, and Auto-Enrollment."

The bill outlines specific definitions and eligibility criteria for employers and employees, as well as the structure of the tax credits. Eligible employers can receive a nonrefundable credit for each eligible employee participating in a qualified retirement plan, capped at $100 per employee and $10,000 per employer per taxable year. Additionally, employers that include an automatic enrollment feature in their qualified retirement plan can claim an extra nonrefundable credit, also capped at $100 per eligible employee, with an aggregate limit of $1,000 per employer per taxable year. The auto-enrollment enhancement credit may be claimed for up to three consecutive taxable years beginning with the first taxable year in which the automatic enrollment feature is implemented.

The act includes provisions for nondiscrimination, coordination with other credits, and reporting and evaluation by the tax administrator. It also specifies that any unused portion of a credit may be carried forward for up to three consecutive taxable years. The bill will take effect for taxable years beginning on or after January 1, 2027, and is designed to align state tax incentives with federal policies under the SECURE Act.