# Plain Language Summary: The PROGRESS Act

This bill creates a new tax credit designed to encourage people to invest money in small, startup businesses. Here's what it actually does: if you put cash into a qualifying startup company, you can get a tax break worth up to 10 percent of your investment each year, with a maximum credit of $10,000 per year. Over time, you could get credits totaling up to $50,000 for a single investment, though once you hit that lifetime limit, you're done getting credits for that particular investment.

The bill also includes a separate tax credit for startup businesses themselves when they hire their first employees. If a qualifying startup pays wages to its initial workers, the company can claim a credit on those wage payments. However, there are strict rules about who qualifies. The startup must be owned and actively managed by people who work in the business (called "qualified active investors"), and these owners can't have made too much money in previous years—generally capped at $100,000 in average annual income, or $200,000 for married couples filing jointly.

The investment credit works differently depending on how you invest. If you buy stock or ownership stakes in the startup, you get the full benefit. But if you loan money to the startup, the credit gets reduced if the interest rate on your loan is higher than the bank prime rate. The idea is to encourage investors to accept lower interest rates to help startups get affordable financing. All of these credits are subject to certification requirements, meaning the startup has to officially confirm it meets the bill's requirements and provide that documentation to both the investor and the IRS.

Providing Real Opportunities for Growth to Rising Entrepreneurs for Sustained Success (PROGRESS) Act

Providing Real Opportunities for Growth to Rising Entrepreneurs for Sustained Success (PROGRESS) Act This bill provides for a new small business investor tax credit to promote investment in start-up businesses and a first employee tax credit equal to 25% of employee wages, up to $10,000 in a taxable year. An employer may elect to apply the amount of the first employee tax credit to payroll tax liability.