A Republican bill with 1 Democratic cosponsor · See all 2 cosponsors
Last activity — Referred to the House Committee on Ways and Means.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- Introduced
- In Committee
What this bill would do
The Small Business Dependent Care FSA Opportunity Act proposes to give certain small employers a tax credit for the costs of starting up dependent care flexible spending plans. This credit covers qualified startup costs, including plan administration and employee education. The credit is available for the first credit year and the two following taxable years. It is limited to a specific dollar amount based on the number of non-highly compensated employees or a maximum cap. To qualify, the employer must not have had a similar plan for the same employees in the previous three years.
Yes· 3 of 11
- Scored +7
Would business owners be better off under this?
Directly provides a tax credit for startup costs of these benefit plans.
- Scored +6
Does this make it easier to run a small business?
Directly supports small employers by reducing the financial burden of implementing dependent care plans.
- Scored +5
Does this make child care cost less?
Encourages small businesses to offer dependent care FSAs, which helps employees pay for childcare with pre-tax dollars.
The opposite
- Scored -1
Does this reduce what the federal government owes?
The introduction of a new tax credit slightly reduces federal tax revenue.
Who it would affect, and how
Potential Positive Impacts for People
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Financial help for small employers: Eligible employers can receive a tax credit for "qualified startup costs," which include expenses for establishing, administering, or educating employees about dependent care flexible spending plans (Sec. 2(d)(1)).
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Support for non-highly compensated employees: The credit amount can be calculated based on $250 for each employee who is not a highly compensated employee and is eligible to participate in the plan (Sec. 2(b)(1)(B)(i)).
Potential Negative Impacts for People
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Limited time frame: The credit is only available for the "first credit year and each of the 2 taxable years immediately following," after which the credit amount is zero (Sec. 2(b)(1) and (2)).
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Strict eligibility limits: Employers are not eligible for the credit if they or a controlled group maintained a similar dependent care flexible spending plan for the same employees during the 3-taxable year period before the first credit year (Sec. 2(c)(2)).
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Capped benefits: The credit is limited to the greater of $500 or the lesser of $250 per eligible non-highly compensated employee, with an absolute maximum cap of $5,000 (Sec. 2(b)(1)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would business owners be better off under this? — Directly provides a tax credit for startup costs of these benefit plans. Would households on low incomes be better off under this? — Provides tax-advantaged ways to pay for dependent care for non-highly compensated employees. Would middle-income households be better off under this? — Allows middle-class workers to reduce taxable income via dependent care FSAs. Would women be better off under this? — Women disproportionately bear the burden of dependent care; FSAs reduce this financial burden. Would people in middle age be better off under this? — Positive for parents in their prime working years who require dependent care. Would children be better off under this? — Indirectly benefits children by encouraging employers to provide support for their care.
- Economy And Finance
- Does this make it easier to run a small business? — Directly supports small employers by reducing the financial burden of implementing dependent care plans. Does this cut taxes for small businesses? — Provides a tax credit for small employers to offset the costs of starting dependent care FSAs. Is this likely to grow the economy? — Supports small business operational capacity by offsetting employee benefit costs. Does this reduce what the federal government owes? — The introduction of a new tax credit slightly reduces federal tax revenue.
- Social Issues And Justice
- Does this make child care cost less? — Encourages small businesses to offer dependent care FSAs, which helps employees pay for childcare with pre-tax dollars. Is this likely to lift people out of poverty? — Increases take-home pay for low-to-middle income workers through pre-tax dependent care arrangements.
- 3/12/2026
- Referred to the House Committee on Ways and Means.
- 2 Cosponsors added.
- Introduced in House
Danny DavisDemocrat · Illinois
Nathaniel MoranRepublican · Texas