H.R. 7922 — Small Business Dependent Care FSA Opportunity Act

This section establishes a new general business tax credit (under new IRC §45BB, added to the list in §38(b)(42)) for eligible small employers (i.e., those with 100 or fewer employees earning at least $5,000 who qualify under IRC §408(p)(2)(C)(i) and did not maintain a substantially similar dependent care flexible spending arrangement (FSA) for the same employees in the prior three taxable years) equal to qualified startup costs paid or incurred to establish, administer, or educate employees about a dependent care FSA (i.e., an employer plan allowing pre-tax employee contributions for dependent care expenses excludible under §129, with at least one non-highly compensated employee participant). The credit is limited to the greater of $500 or the lesser of $250 per eligible non-highly compensated employee or $5,000 in the first credit year (the year the plan is effective or the prior year, if elected) and the next two taxable years (zero thereafter). The amendments apply to amounts paid or incurred after the date of enactment, in taxable years ending after such date.