I 
117TH CONGRESS 
1ST SESSION H. R. 4354 
To amend the Internal Revenue Code of 1986 to improve the employer- 
provided child care tax credit. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 2, 2021 
Mr. WENSTRUP (for himself and Mrs. STEEL) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to improve 
the employer-provided child care tax credit. 
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 ‘‘Child Care Flexibility 
for Working Families Act’’. 
SEC. 2. IMPROVEMENTS TO THE EMPLOYER-PROVIDED 
CHILD CARE TAX CREDIT. 
(a) CREDIT ALLOWED FOR REIMBURSEMENT OF EM-
PLOYEE CHILD CARE EXPENSES.—Section 45F(c)(1)(A) 
of the Internal Revenue Code of 1986 is amended by strik-
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ing ‘‘or’’ at the end of clause (ii), by striking the period 
at the end of clause (iii) and inserting ‘‘, or’’, and by add-
ing at the end the following new clause: 
‘‘(iv) to reimburse an employee for 
child care costs necessary for the employ-
ee’s employment.’’. 
(b) CREDIT NOT RESTRICTED TO CHILD CARE FA-
CILITIES
PROVIDING
EMPLOYER-PROVIDED
CHILD 
CARE.— 
(1) IN
GENERAL.—Section 45F(c)(2)(B) of 
such Code is amended in clause (i) by inserting 
‘‘and’’ after the comma, by striking clause (ii), and 
by redesignating clause (iii) as clause (ii). 
(2) CONFORMING AMENDMENTS.— 
(A) The heading for section 45F of such 
Code is amended to read as follows: 
‘‘SEC. 45F CHILD CARE BUSINESS CREDIT.’’. 
(B) The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of subtitle 
A of such Code is amended by striking the item 
relating to section 45F and inserting the fol-
lowing new item: 
‘‘45F. Child care business credit.’’. 
(c) CREDIT PERCENTAGE
FOR SMALL EMPLOY-
ERS.—Section 45F(e) of such Code is amended by adding 
at the end the following new paragraph: 
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‘‘(4) CREDIT
PERCENTAGE
FOR
SMALL
EM-
PLOYERS.— 
‘‘(A) IN
GENERAL.—With respect to a 
small employer, subsection (a)(1) shall be ap-
plied by substituting ‘50 percent’ for ‘25 per-
cent’. 
‘‘(B) SMALL
EMPLOYER.—For the pur-
poses of this paragraph, the term ‘small em-
ployer’ means, with respect to any taxable year, 
any employer if— 
‘‘(i) the average number of employees 
of such employer on business days during 
such taxable year does not exceed 50, and 
‘‘(ii) the gross receipts of such em-
ployer during such taxable year do not ex-
ceed $25,000,000.’’. 
(d) STUDY OF IMPACT OF TAX CREDIT FOR EM-
PLOYER-PROVIDED CHILD CARE.— 
(1) IN GENERAL.—Not later than 18 months 
after the date of the enactment of this Act, the 
Comptroller General of the United States, in con-
sultation with the Secretary of the Treasury and the 
Secretary of Labor, shall— 
(A) complete a study that examines the tax 
credit for employer-provided child care author-
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ized under section 45F of the Internal Revenue 
Code of 1986 by considering such metrics as— 
(i) the characteristics of employers 
that take the credit, including the size of 
such employer, whether such employer is in 
a rural or urban location, and whether 
such employer also offers a dependent care 
assistance program described in section 
129 of such Code, 
(ii) the characteristics of employers 
that do not take the credit, 
(iii) the extent to which employees 
benefit when employers provide child care 
and take the credit, 
(iv) any challenges identified by em-
ployers that do not take the credit, and 
(v) any explanations from employers 
as to why they do or do not take the cred-
it, and 
(B) prepare and submit a report to the 
Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of 
Representatives setting forth the conclusions of 
the study conducted under subparagraph (A) in 
such a manner that the recommendations in-
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cluded in the report can inform future legisla-
tive action. Such report shall also be made pub-
licly available on the website of the Government 
Accountability Office. 
(2) PROHIBITION.—In carrying out the require-
ments of this section, the Comptroller General of the 
United States may request qualitative and quan-
titative information from employers claiming the 
credit under section 45F of the Internal Revenue 
Code of 1986, but nothing in this section shall be 
construed as mandating additional reporting require-
ments for such employers beyond what is already re-
quired by law. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of enactment of this Act. 
Æ 
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