This bill creates a new tax credit to help small businesses cover the startup costs of establishing dependent care flexible spending accounts (FSAs) for their employees. The credit applies to small employers with fewer than 100 employees who set up a new dependent care FSA for the first time. Eligible employers can claim up to $500 per year (or up to $250 per eligible non-highly-compensated employee, capped at $5,000) for three consecutive years starting when the plan becomes effective, covering expenses like plan administration and employee education. The credit is available only if the plan has at least one eligible participant and the employer hasn't maintained a similar plan in the three years prior to establishing the new one. The bill takes effect immediately and applies to costs paid after its enactment.
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