What does Preamble of Small Business Dependent Care FSA Opportunity Act do?

This bill aims to amend the Internal Revenue Code of 1986 The amendment provides a credit to certain small employers The credit is for the startup costs of dependent care flexible spending plans

What does SHORT TITLE. of Small Business Dependent Care FSA Opportunity Act do?

This bill is formally titled the Small Business Dependent Care FSA Opportunity Act.

What does SMALL EMPLOYER DEPENDENT CARE FLEXIBLE SPENDING PLAN STARTUP of Small Business Dependent Care FSA Opportunity Act do?

This section amends the Internal Revenue Code of 1986 to establish a small employer dependent care flexible spending plan startup cost credit. The credit is available to eligible employers for qualified startup costs paid or incurred in connection with establishing or administering a dependent care flexible spending plan, or educating employees about such a plan. The credit amount is limited to $500 for the first credit year and the two immediately following years, or the lesser of $250 for each eligible employee (who is not a highly compensated employee) or $5,000. An 'eligible employer' is defined by section 408(p)(2)(C)(i) and excludes employers who previously established or maintained a similar plan for substantially the same employees. The 'first credit year' is the year the plan becomes effective or, at the employer's election, the preceding year. The amendments apply to amounts paid or incurred after the date of enactment of this Act, in taxable years ending after such date.

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Small Business Dependent Care FSA Opportunity Act

Last updated: 3/12/2026 · Introduced: 3/12/2026

Author: Adrian Smith (R-NE)

TL;DR (AI)

The bill establishes a credit for small employers to cover startup costs of dependent care flexible spending plans, with a maximum credit of $500 for the first three years.
The credit amount is limited to $250 per eligible employee, up to a total of $5,000, and is only available to employers who have not previously established a similar plan for the same employees.
The credit is available for qualified startup costs, including those related to establishing, administering, or educating employees about the dependent care flexible spending plan.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 1 more.

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