The Retaining Educators Takes Added Investment Now (RETAIN) Act aims to combat the national shortage of qualified educators and school leaders by establishing a new refundable tax credit. This legislation recognizes that low pay, high turnover, and inadequate support contribute to these shortages, particularly in high-poverty areas. The bill seeks to reward the retention of professionals serving in early childhood, elementary, and secondary education settings, especially those working with high-need students.

The core of the RETAIN Act is a refundable tax credit for eligible individuals, including early childhood educators, teachers, paraprofessionals, school leaders, and school-based mental health services providers. The credit amount varies based on the number of continuous years of employment in an eligible position, starting at $5,800 for the first two years and peaking at $11,600 for the tenth year. After 20 years of service, the credit amount is reduced to zero, and all dollar amounts will be adjusted for inflation after 2026.

To qualify, individuals must be employed in a qualifying early childhood education program or a qualifying school, generally defined as those serving students eligible for Title I assistance or funded by the Bureau of Indian Education. The bill includes a crucial non-supplanting provision, prohibiting state and local educational agencies from reducing existing compensation or loan forgiveness programs due to an individual's eligibility for this federal tax credit. This ensures the credit provides additional support rather than replacing current benefits.

Beyond the tax credit, the RETAIN Act mandates the Secretary of Labor, in coordination with other federal agencies, to develop and annually publish a comprehensive data series. This series will capture the average base salaries of elementary and secondary school teachers, disaggregated by employment in Title I eligible schools and geographic region. It will also include average base salaries for early childhood educators, disaggregated by their highest degree attained, providing valuable insights into educator compensation.