Child Care Flexibility for Working Families Act
Bill: H.R.4354 | Sponsor: Rep. Wenstrup, Brad R. (R-OH)
Policy area: Taxation

Summary:
Child Care Flexibility for Working Families Act
This bill modifies the tax credit for employer-provided child care to (1) allow the credit for the reimbursement of costs necessary for an employee's employment, and (2) allow an increased credit for certain small businesses (i.e., businesses with gross receipts not exceeding $25 million and with not more than 50 employees in a taxable year).
The bill also requires the Government Accountability Office to complete a study that examines certain aspects of the tax credit.

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 Representatives 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 Employee Child Care 
Expenses.--Section 45F(c)(1)(A) of the Internal Revenue Code of 1986 is 
amended by striking ``or'' at the end of clause (ii), by striking the 
period at the end of clause (iii) and inserting ``, or'', and by adding 
at the end the following new clause:
                            ``(iv) to reimburse an employee for child 
                        care costs necessary for the employee's 
                        employment.''.
    (b) Credit Not Restricted to Child Care Facilities 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 following new item:

``45F. Child care business credit.''.
    (c) Credit Percentage for Small Employers.--Section 45F(e) of such 
Code is amended by adding at the end the following new paragraph:
            ``(4) Credit percentage for small employers.--
                    ``(A) In general.--With respect to a small 
                employer, subsection (a)(1) shall be applied by 
                substituting `50 percent' for `25 percent'.
                    ``(B) Small employer.--For the purposes of this 
                paragraph, the term `small employer' 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 employer 
                        during such taxable year do not exceed 
                        $25,000,000.''.
    (d) Study of Impact of Tax Credit for Employer-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 consultation 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 authorized 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 employers 
                        that do not take the credit, and
                            (v) any explanations from employers as to 
                        why they do or do not take the credit, 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 included 
                in the report can inform future legislative action. 
                Such report shall also be made publicly available on 
                the website of the Government Accountability Office.
            (2) Prohibition.--In carrying out the requirements of this 
        section, the Comptroller General of the United States may 
        request qualitative and quantitative 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 requirements for such employers 
        beyond what is already required 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.
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