One tax-related provision of the proposed One, Big, Beautiful Bill Act (OBBBA) that has slid under the radar is an enhancement of the Employer-Provided Child Care Credit. Currently, tax law provides eligible businesses a nonrefundable, annual tax credit of $150,000 on up to 25% of qualified child care expenses and 10% of qualified resource and referral expenses. The OBBBA would permanently increase the maximum Sec. 45F credit to $500,000, indexed annually for inflation. The bill would increase the percentage of qualified child care expenses covered to 40%. Additionally, the OBBBA would create a higher limit for qualified small businesses. The bill is now being considered by the U.S. Senate.
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