H.R. 3308 — RETAIN Act

This section states the purpose of the Act to create a refundable tax credit for early childhood educators, teachers, early childhood education program directors, school leaders, and school-based mental health services providers in early childhood, elementary, and secondary education settings that rewards retention based on time spent serving high-need students.

This section states congressional findings on the nationwide shortage of qualified early childhood educators and elementary and secondary school teachers, its causes (e.g., low pay, turnover, poor conditions), disproportionate impacts in high-poverty areas and on teachers of color, and benefits of experienced, diverse educators and school leaders for student outcomes and retention. Among other data, the findings cite 2021 median pay of $30,210 for early childhood educators (many relying on public assistance); 2023–2024 average K-12 teacher salary of $72,030 (down 6.4% inflation-adjusted over the past decade and 23.5% below other college graduates); first-year teacher salary of $46,526; and attrition of 300,000 public school teachers (nearly 3%) from February 2020 to May 2022.

This section establishes a new refundable income tax credit under new IRC §36C (inserted after §36B) for eligible individuals employed during a school year ending with or within the taxable year in specified positions, including eligible teachers, school leaders, paraprofessionals, school-based mental health services providers, early childhood educators, program directors, and providers. (1) The credit amount, based on continuous years in such positions, is $5,800 for year 1 (requiring at least 4 months' employment before the taxable year begins) and year 2, $7,000 for years 3–4, $8,700 for years 5–9 and 11–15, $11,600 for year 10, $7,000 for year 16, and $5,800 for years 17–20, reduced to zero after 20 total years. (2) Amounts are adjusted for inflation after 2026 using chained CPI-U (base year 2025, rounded to nearest $100). This section prohibits state and local educational agencies from reducing compensation or loan forgiveness for eligible employees due to the credit (supplemental, not supplanting) and requires them, upon request by the Secretary of Education, to demonstrate equivalent state/local funding allocation methodology. This section directs the Secretaries of Education and Health and Human Services to share information with Treasury to verify qualifying early childhood programs and elementary/secondary schools (using ESEA definitions).

This section directs the Secretary of Labor, in coordination with the Secretaries of the Treasury, Education, and Health and Human Services, to develop and publish on the Bureau of Labor Statistics website a data series capturing (1) the average base salary of elementary and secondary school teachers, disaggregated by employment in public schools receiving assistance under part A of title I of the Elementary and Secondary Education Act of 1965 (i.e., Title I schools serving low-income students), public schools not receiving such assistance, and geographic region; and (2) the average base salary of early childhood educators, disaggregated by highest level of degree attained. The section requires annual updates to the data series.