The RETAIN Act creates a new federal tax credit to help retain educators and school leaders in early childhood, elementary, and secondary education. The refundable credit provides payments ranging from $5,800 to $11,600 per year based on years of continuous service, with the highest amount ($11,600) going to educators in their tenth year of employment. The credit applies to teachers, early childhood educators, school principals and leaders, paraprofessionals, and school-based mental health providers who work in high-poverty school districts or eligible early childhood programs. The tax credit becomes available for the 2026 tax year and will adjust annually for inflation. Schools and districts receiving the credit cannot reduce educator salaries or loan forgiveness programs as a result, ensuring the credit supplements rather than replaces existing education funding. The bill also requires the Department of Labor to publish annual data on teacher and early childhood educator salaries to track workforce trends.
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