I 
118TH CONGRESS 
1ST SESSION H. R. 3265 
To amend the Internal Revenue Code of 1986 to address the teacher and 
school leader shortage in early childhood, elementary, and secondary 
education, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 11, 2023 
Mr. SCHNEIDER (for himself and Ms. STEVENS) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Education and the Workforce, for a period to 
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to address 
the teacher and school leader shortage in early childhood, 
elementary, and secondary education, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Retaining Educators 
Takes Added Investment Now Act’’ or the ‘‘RETAIN 
Act’’. 
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SEC. 2. PURPOSE. 
The purpose of this Act is to create a refundable tax 
credit for early childhood educators, teachers, early child-
hood 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 the time spent serving 
high-need students. 
SEC. 3. FINDINGS. 
Congress finds the following: 
(1) The shortage of experienced, qualified early 
childhood educators and elementary school and sec-
ondary school teachers is a national problem that 
compromises the academic outcomes and long-term 
success of students. 
(2) The shortage is the result of many factors 
including low pay, frequent turnover in school lead-
ership, poor teaching conditions, and inadequate 
teacher supports. 
(3) The shortage is worse in high-poverty areas 
where the factors contributing to the shortage are 
particularly acute and have an increased negative 
impact on teachers of color remaining in the field. 
(4) A child’s access to high-quality early child-
hood education is critical to supporting positive out-
comes, and early childhood educators— 
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(A) play an important role in setting the 
foundation for future learning, and 
(B) promote the development of vital skills, 
habits, and mindsets that children need to be 
successful in school and in life. 
(5) In 2021, the national median pay of early 
childhood educators was a mere $30,210, with many 
early childhood educators relying on government as-
sistance programs such as Medicaid, the supple-
mental nutrition assistance program established 
under the Food and Nutrition Act of 2008 (7 U.S.C. 
2011 et seq.), or the temporary assistance for needy 
families program established under part A of title IV 
of the Social Security Act (42 U.S.C. 601 et seq.), 
and struggling to provide for their own families. 
(6) Studies have demonstrated that well-quali-
fied, experienced teachers are the single most impor-
tant school-based element contributing to a child’s 
academic achievement and success. 
(7) In the 2021–2022 academic year, the aver-
age teacher salary in public elementary schools and 
secondary schools was only $66,397, a 2 percent in-
crease from the previous academic year. When ad-
justed for inflation, the average teacher salary has 
declined by 6.4 percent over the past decade. 
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(8) On average, public elementary school and 
secondary school teachers were paid 23.5 percent 
less than other college graduates working in non- 
teaching fields, and many teachers struggle with 
large amounts of student loan debt. 
(9) In 2021, the average teacher salary for a 
first-year teacher in a public elementary school or 
secondary school was $41,770. 
(10) An experienced, well-qualified education 
workforce must also be reflective of the diversity of 
the student body across race, ethnicity, and dis-
ability. 
(11) Higher pay for teachers can result in a 
more diverse teacher workforce, and minority stu-
dents often perform better on standardized tests, 
have improved attendance, and are suspended less 
frequently when they have at least one same-race 
teacher. 
(12) Experienced, well-qualified school leaders 
and school-based mental health service providers are 
essential for providing strong educational opportuni-
ties and services for students and promoting teacher 
retention through improved professional supports 
and teaching conditions. 
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(13) Between February 2020 and May 2022, at 
least 300,000 teachers at public elementary schools 
and secondary schools left the field, a nearly 3 per-
cent decline in the teacher workforce. 
SEC. 4. REFUNDABLE TAX CREDIT FOR TEACHER AND 
SCHOOL LEADER RETENTION. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of subtitle A of the Internal Rev-
enue Code of 1986 is amended by inserting after section 
36B the following new section: 
‘‘SEC. 36C. TEACHER AND SCHOOL LEADER RETENTION 
CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
who is employed in a position described in paragraph 
(2) during a school year ending with or within the 
taxable year, there shall be allowed as a credit 
against the tax imposed by this subtitle for the tax-
able year an amount equal to the applicable amount 
(as determined under subsection (b)). 
‘‘(2) ELIGIBLE POSITIONS.—The positions de-
scribed in this paragraph shall consist of the fol-
lowing: 
‘‘(A) An eligible early childhood educator. 
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‘‘(B) An eligible early childhood education 
program director. 
‘‘(C) An eligible early childhood education 
provider. 
‘‘(D) An eligible teacher. 
‘‘(E) An eligible paraprofessional. 
‘‘(F) An eligible school-based mental 
health services provider. 
‘‘(G) An eligible school leader. 
‘‘(b) APPLICABLE AMOUNT.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the applicable amount shall be an amount de-
termined based on the number of school years for 
which the individual has been continuously employed 
in any position described in subsection (a)(2), as fol-
lows: 
‘‘(A) Subject to paragraph (2), for the first 
year of employment, $5,800. 
‘‘(B) For the second continuous year of 
employment, $5,800. 
‘‘(C) For the third and fourth continuous 
year of employment, $7,000. 
‘‘(D) For the fifth, sixth, seventh, eighth, 
and ninth continuous year of employment, 
$8,700. 
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‘‘(E) For the tenth continuous year of em-
ployment, $11,600. 
‘‘(F) For the eleventh, twelfth, thirteenth, 
fourteenth, and fifteenth continuous year of em-
ployment, $8,700. 
‘‘(G) For the sixteenth continuous year of 
employment, $7,000. 
‘‘(H) For the seventeenth, eighteenth, 
nineteenth, and twentieth continuous year of 
employment, $5,800. 
‘‘(2) FIRST YEAR.—For purposes of the first 
year of employment ending with or within a taxable 
year, an individual must have been so employed for 
a period of not less than 4 months before the first 
day of such taxable year. 
‘‘(3) LIMITATION BASED ON TOTAL NUMBER OF 
SCHOOL YEARS.—In the case of any individual who 
has been employed in any position described in sub-
section (a)(2) for a total of more than 20 school 
years, the applicable amount shall be reduced to 
zero. 
‘‘(c) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2024, each of the dollar 
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amounts in subsection (b)(1) shall be increased by 
an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar 
year by substituting ‘calendar year 2023’ for 
‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(2) ROUNDING.—If any increase determined 
under paragraph (1) is not a multiple of $100, such 
increase shall be rounded to the nearest multiple of 
$100. 
‘‘(d) SUPPLEMENTING, NOT SUPPLANTING, STATE 
AND LOCAL EDUCATION FUNDS.— 
‘‘(1) IN GENERAL.—A State educational agency 
or local educational agency shall not reduce or ad-
just any compensation, or any assistance provided 
through a loan forgiveness program, to an employee 
of the State educational agency or local educational 
agency who serves in any position described in sub-
section (a)(2) due to the individual’s eligibility for 
the credit under this section. 
‘‘(2) METHODOLOGY.—Upon request by the 
Secretary of Education, a State educational agency 
or local educational agency shall reasonably dem-
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onstrate that the methodology used to allocate 
amounts for compensation and for loan forgiveness 
to the employees described in paragraph (1) at 
qualifying schools or qualifying early childhood edu-
cation programs ensures that employees at each 
qualifying school or qualifying early childhood edu-
cation program in the State or served by the local 
educational agency, respectively, receive the same 
amount of State or local funds for compensation and 
loan forgiveness that the qualifying school or quali-
fying early childhood education program would re-
ceive if the credit under this section had not been 
enacted. 
‘‘(e) INFORMATION
SHARING.—The Secretary of 
Education and the Secretary of Health and Human Serv-
ices shall provide the Secretary with such information as 
is necessary for purposes of determining whether an early 
childhood education program or an elementary school or 
secondary school satisfies the requirements for a quali-
fying early childhood education program or a qualifying 
school, respectively. 
‘‘(f) DEFINITIONS.—For purposes of this section— 
‘‘(1) ESEA DEFINITIONS.—The terms ‘elemen-
tary school’, ‘local educational agency’, ‘secondary 
school’, and ‘State educational agency’ have the 
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meanings given the terms in section 8101 of the Ele-
mentary and Secondary Education Act of 1965 (20 
U.S.C. 7801). 
‘‘(2) ELIGIBLE EARLY CHILDHOOD EDUCATION 
PROGRAM DIRECTOR.—The term ‘eligible early child-
hood education program director’ means an em-
ployee or officer of a qualifying early childhood edu-
cation program who is responsible for the daily in-
structional leadership and managerial operations of 
such program. 
‘‘(3) ELIGIBLE EARLY CHILDHOOD EDUCATION 
PROVIDER.—The term ‘eligible early childhood edu-
cation provider’ means an individual— 
‘‘(A) who— 
‘‘(i) has an associate’s degree or high-
er degree in early childhood education or a 
related field, or 
‘‘(ii) is enrolled during the taxable 
year in a program leading to such an asso-
ciate’s or higher degree and is making sat-
isfactory progress toward such degree, and 
‘‘(B) who is responsible for the daily in-
structional leadership and managerial oper-
ations of a qualifying early childhood education 
program in a home-based setting. 
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‘‘(4) ELIGIBLE
EARLY
CHILDHOOD
EDUCA-
TOR.—The term ‘eligible early childhood educator’ 
means an individual— 
‘‘(A) who— 
‘‘(i) has an associate’s degree or high-
er degree in early childhood education or a 
related field, or 
‘‘(ii) is enrolled during the taxable 
year in a program leading to such an asso-
ciate’s or higher degree and is making sat-
isfactory progress toward such degree, 
‘‘(B) who has credentials or a license 
under State law for early childhood education, 
as applicable, and 
‘‘(C) whose primary responsibility is for 
the learning and development of children in a 
qualifying early childhood education program 
during the taxable year. 
‘‘(5) ELIGIBLE PARAPROFESSIONAL.—The term 
‘eligible paraprofessional’ means an individual— 
‘‘(A) who is a paraprofessional, as defined 
in section 3201 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 
7011), 
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‘‘(B) who meets the applicable State pro-
fessional standards and qualifications pursuant 
to section 1111(g)(2)(M) of such Act (20 
U.S.C. 6311(g)(2)(M)), 
‘‘(C) whose primary responsibilities involve 
working or assisting in a classroom setting, and 
‘‘(D) who is employed in a qualifying 
school or a qualifying early childhood education 
program. 
‘‘(6) 
ELIGIBLE
SCHOOL-BASED
MENTAL 
HEALTH
SERVICES
PROVIDER.—The term ‘eligible 
school-based mental health services provider’ means 
an individual— 
‘‘(A) described in section 4102(6) of the 
Elementary and Secondary Education Act of 
1965 (20 U.S.C. 7112(6)), and 
‘‘(B) who is employed in a qualifying 
school or a qualifying early childhood education 
program. 
‘‘(7) ELIGIBLE
SCHOOL
LEADER.—The term 
‘eligible school leader’ means a principal, assistant 
principal, or other individual who is— 
‘‘(A) an employee or officer of a qualifying 
school, and 
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‘‘(B) responsible for the daily instructional 
leadership and managerial operations in the 
qualifying school. 
‘‘(8) ELIGIBLE TEACHER.—The term ‘eligible 
teacher’ means an individual who— 
‘‘(A) is an elementary school or secondary 
school teacher who, as determined by the State 
or local educational agency, is a teacher of 
record who provides direct classroom teaching 
(or classroom-type teaching in a nonclassroom 
setting) to students in a qualifying school, and 
‘‘(B)(i) meets applicable State certification 
and licensure requirements, including any re-
quirements for certification obtained through 
alternative routes to certification, in the State 
in which such school is located and in the sub-
ject area in which the individual is the teacher 
of record, or 
‘‘(ii) is enrolled during the taxable year in 
a program leading to State certification and li-
censure as described in clause (i) and is making 
satisfactory progress toward such certification 
and licensure requirements. 
‘‘(9) QUALIFYING
EARLY
CHILDHOOD
EDU-
CATION PROGRAM.— 
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‘‘(A) IN GENERAL.—The term ‘qualifying 
early childhood education program’ means an 
early childhood education program, as defined 
in section 103 of the Higher Education Act of 
1965 (20 U.S.C. 1003), that, regardless of set-
ting— 
‘‘(i) serves children who receive serv-
ices for which financial assistance is pro-
vided in accordance with the Child Care 
and Development Block Grant Act of 1990 
(42 U.S.C. 9857 et seq.), the Head Start 
Act (42 U.S.C. 9831 et seq.), or the child 
and adult care food program established 
under section 17 of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 
1766), and 
‘‘(ii) participates in a State tiered and 
transparent system for measuring program 
quality. 
‘‘(B) 
SPECIAL
RULE.—Notwithstanding 
subparagraph (A), an early childhood education 
program that does not satisfy the requirements 
of subparagraph (A)(ii) shall be deemed to be 
a qualifying early childhood education program 
until September 30, 2023, if the program— 
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‘‘(i) satisfies all requirements of sub-
paragraph (A) except for clause (ii) of 
such subparagraph, and 
‘‘(ii)(I) meets the Head Start program 
performance standards described in section 
641A(a) of the Head Start Act (42 U.S.C. 
9836a(a)), if applicable, or 
‘‘(II) is accredited by a national 
accreditor of early learning programs as of 
the date of enactment of the Retaining 
Educators Takes Added Investment Now 
Act. 
‘‘(10) QUALIFYING SCHOOL.—The term ‘quali-
fying school’ means— 
‘‘(A) a public elementary school or sec-
ondary school that— 
‘‘(i) is in the school district of a local 
educational agency that is eligible for as-
sistance under part A of title I of the Ele-
mentary and Secondary Education Act of 
1965 (20 U.S.C. 6311 et seq.), or 
‘‘(ii) is served or operated by an edu-
cational service agency that is eligible for 
such assistance, or 
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‘‘(B) an elementary school or secondary 
school that is funded by the Bureau of Indian 
Education and that is in the school district of 
a local educational agency that is eligible for 
such assistance.’’. 
(b) W–2 REPORTING OF CONTINUOUS EMPLOYMENT 
FOR CERTAIN POSITIONS AT QUALIFYING EARLY CHILD-
HOOD
EDUCATION
PROGRAMS
OR
QUALIFYING 
SCHOOLS.—Section 6051(a) of the Internal Revenue Code 
of 1986 is amended by striking ‘‘and’’ at the end of para-
graph (16), by striking the period at the end of paragraph 
(17) and inserting ‘‘, and’’, and by inserting after para-
graph (17) the following new paragraph: 
‘‘(18) in the case of an employee who is em-
ployed in a position described in subsection (a)(2) of 
section 36C, the number of school years for which 
such employee has been continuously employed in 
any such position.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of subtitle A of the 
Internal Revenue Code of 1986 is amended by in-
serting after the item relating to section 36B the fol-
lowing: 
‘‘Sec. 36C. Teacher and school leader retention credit.’’. 
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(2) Section 6211(b)(4)(A) of such Code is 
amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 
(3) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting 
‘‘36C,’’ after ‘‘36B,’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2023. 
SEC. 5. DEVELOPING INTERAGENCY DATA SERIES. 
The Secretary of Labor, in coordination with the Sec-
retary of the Treasury, the Secretary of Education, and 
the Secretary of Health and Human Services, shall— 
(1) develop and publish on the internet website 
of the Bureau of Labor Statistics a data series that 
captures— 
(A) the average base salary of teachers in 
elementary schools and secondary schools, 
disaggregated by— 
(i) employment in public elementary 
schools and secondary schools that receive 
assistance under part A of title I of the El-
ementary and Secondary Education Act of 
1965 (20 U.S.C. 6311 et seq.), 
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(ii) employment in public elementary 
schools and secondary schools that do not 
receive such assistance, and 
(iii) geographic region, and 
(B) the average base salary of early child-
hood educators, disaggregated by highest level 
of degree attained, and 
(2) update the data series under paragraph (1) 
on an annual basis. 
Æ 
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