To amend the Internal Revenue Code of 1986 to establish a tax credit for small businesses to provide diaper changing stations in restrooms.

Bill Number

H.R. 5440

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-09-17: Referred to the House Committee on Ways and Means.

Last Updated

2025-09-30T23:28:29Z

AI-Generated Summary

Purpose

This legislation aims to encourage small businesses to install family-friendly restroom facilities by providing a tax credit for costs related to diaper changing stations and dispensers. It seeks to improve accessibility for parents and caregivers in public spaces.

Key Provisions

• Tax Credit Amount: Eligible small businesses can claim a credit equal to 70% of qualified expenses for installing diaper changing stations, diaper dispensers, or renovating restrooms to meet family bathroom standards. The credit is limited to $10,000 per business location over the business's lifetime (across the current and three prior tax years).
• Eligible Businesses: Applies to "small businesses" defined as those with annual gross receipts of $5 million or less, or fewer than 100 full-time equivalent employees. Related businesses under common ownership are aggregated for eligibility.
• Qualified Expenses: Includes costs for:
• Diaper changing stations (must be free to use) in restrooms.
• Diaper dispensers (may charge a fee and can dispense other hygiene products).
• Labor and installation for new or renovated restrooms.
• Family Bathroom Requirement: To qualify, the business location must have at least one public restroom accessible to both men and women, equipped with a free diaper changing station and a diaper dispenser.
• Business Location Definition: Generally, each building where the business operates counts as a separate location. If multiple businesses operate in parts of the same building, each portion can qualify separately if it meets the requirements.
• Effective Date: Applies to tax years beginning after December 31, 2025.
• No Double Benefits: Businesses cannot claim other tax deductions or credits for the same expenses, and the property's tax basis is reduced by the credit amount.

Significant Changes to Existing Law

• Adds a new section (45BB) to the Internal Revenue Code of 1986, creating the "Diaper Changing Station Restroom Credit" as part of the general business credit under section 38.
• This is a new incentive not previously available, integrating it into the existing framework of business tax credits without altering other credits directly.

Potential Impacts

• Government Agencies: The Internal Revenue Service (IRS) will need to administer the new credit, potentially increasing administrative workload for verifying eligibility and expenses. It may reduce federal tax revenue by the amount of credits claimed (estimated low due to the cap and small business focus).
• Citizens: Benefits families and caregivers by increasing availability of free or low-cost diaper changing facilities in small business restrooms, potentially easing travel and daily activities for parents with young children. No direct international relations impacts.
• Businesses: Lowers the net cost of making restrooms more inclusive, which could improve customer satisfaction and foot traffic without significant burden on larger businesses (which are ineligible).

Main Stakeholders Affected

• Small Business Owners: Primary beneficiaries, as they can offset installation costs through tax savings.
• Parents and Families: Gain better access to essential facilities in public restrooms.
• IRS and Taxpayers: IRS handles implementation; general taxpayers may see minor revenue shifts funding the credits.
• Hygiene Product Suppliers: Could see increased demand for changing stations and dispensers.

Notable Legal, Constitutional, or Political Implications

• Legal: The credit is straightforward and aligns with existing tax code structures for business incentives, with clear aggregation rules to prevent abuse. No conflicts with anti-discrimination laws, as it promotes gender-neutral access.
• Constitutional: No apparent issues; it supports equal access under the Equal Protection Clause by facilitating family accommodations without favoring any group.
• Political: Represents a bipartisan effort (introduced by a diverse group of representatives) to address practical family needs, potentially appealing as a low-cost, targeted policy. It could set a precedent for future incentives on workplace or public accessibility improvements, though fiscal conservatives might critique it as unnecessary spending.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Menendez, Robert [D-NJ-8]

Cosponsors (11)

Rep. Gomez, Jimmy [D-CA-34], Rep. Pettersen, Brittany [D-CO-7], Rep. Mackenzie, Ryan [R-PA-7], Rep. Landsman, Greg [D-OH-1], Rep. Goldman, Daniel S. [D-NY-10], Rep. Tlaib, Rashida [D-MI-12], Rep. Foushee, Valerie P. [D-NC-4], Rep. Swalwell, Eric [D-CA-14], Rep. Kennedy, Timothy M. [D-NY-26], Rep. Carson, André [D-IN-7], Rep. Lawler, Michael [R-NY-17]

Recent Actions

• 2025-09-17: Referred to the House Committee on Ways and Means.
• 2025-09-17: Introduced in House
• 2025-09-17: Introduced in House

Bill Versions

• To amend the Internal Revenue Code of 1986 to establish a tax credit for small businesses to provide diaper changing stations in restrooms. — issued 2025-09-17 — PDF (6 pages)