Child Care Tax Benefit Outreach and Assistance Act

Bill Number

S. 4071

Origin Chamber

Senate

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-03-12: Read twice and referred to the Committee on Finance.

Last Updated

2026-03-31T21:35:03Z

AI-Generated Summary

Purpose

The legislation, titled the "Child Care Tax Benefit Outreach and Assistance Act," aims to promote employer-provided child care benefits by establishing a dedicated position within the Internal Revenue Service (IRS). This role focuses on educating businesses, employees, and other groups about existing tax incentives for child care, such as flexible spending accounts and tax credits, to encourage wider adoption and reduce barriers to these benefits.

Key Provisions

• Appointment of Business Child Care Liaison: The IRS Commissioner must appoint a Business Child Care Liaison, exempt from standard federal hiring rules for competitive or executive positions. The Commissioner may also create an office with support staff to assist this role.
• Duties of the Liaison:
• Serve as a connector between the IRS, businesses, state workforce and economic development agencies, child care resource organizations, tribal groups, and experts to promote child care benefits like on-site care, subsidies, stipends, backup care, and referral services.
• Provide public education and assistance on expanding these benefits, including tax advantages under the Dependent Care Flexible Spending Accounts (a pre-tax savings option for child care expenses) and the Section 45F credit (a tax credit for employers offering child care).
• Create a fact sheet for tax return preparers explaining available tax benefits and rules.
• Facilitate discussions between businesses and the IRS on challenges and opportunities for using these incentives.
• Collaborate with the General Services Administration to add a dedicated link on the SAM.gov website (a federal procurement portal) within 120 days of enactment, directing users to resources on child care programs, rules, and benefits for worker recruitment, retention, productivity, and well-being.
• Identify and recommend legislative or administrative changes to Congress to boost employer child care practices.
• Coordinate outreach with federal agencies (e.g., Small Business Administration, Departments of Commerce, Health and Human Services, Interior, Labor, and Education), states, and localities to inform employers and employees, with a focus on small businesses.
• Consultation Requirement: The IRS Commissioner must seek input from the Liaison when developing rules or guidance related to employer child care benefits.
• Compensation: The Liaison receives pay equivalent to Level V of the Executive Schedule (a federal pay scale for high-level positions, currently around $150,000 annually).
• Annual Reporting: Starting the year after enactment, the Liaison submits an annual report to Senate Finance and House Ways and Means Committees by December 31. Reports cover:
• Assistance requests received.
• Activities conducted and their effectiveness.
• Identified problems and mitigation strategies.
• Recommendations for administrative or legislative actions to remove barriers and incentivize benefits.
• Progress on child care benefits, including data on usage of flexible spending accounts and the Section 45F credit (e.g., number of employers by business size).
• Reports are also shared with the IRS Commissioner and made publicly available.

Significant Changes to Existing Law

This bill amends Section 7803 of the Internal Revenue Code of 1986 by adding a new subsection (g), which introduces the Business Child Care Liaison position and its responsibilities. It does not alter tax rates, eligibility for benefits, or core tax code provisions but expands the IRS's administrative role to include proactive outreach and coordination on existing child care incentives. No other sections of the tax code are modified.

Potential Impacts

• On Government Agencies: The IRS gains a new outreach function, requiring coordination with multiple federal agencies and potentially minimal additional staffing costs (at the Commissioner's discretion). Other agencies, like the Small Business Administration and Department of Labor, may see increased collaborative efforts on workforce issues. Annual reports could inform future policy without mandating new funding.
• On Citizens: Working parents may benefit from better awareness and access to tax-advantaged child care options, potentially easing financial burdens and improving work-life balance. However, impacts depend on businesses adopting these benefits.
• On Businesses: Small and large employers could face fewer informational hurdles to offering child care perks, aiding employee retention and productivity. The SAM.gov link targets federal contractors specifically.
• On International Relations: No direct effects, as the focus is domestic tax policy and workforce support.

Main Stakeholders Affected

• IRS and Federal Agencies: Directly responsible for implementation, coordination, and reporting.
• Businesses: Especially small businesses and federal contractors, who gain resources to explore child care incentives.
• Employees and Families: Particularly working parents seeking affordable child care options through employer benefits.
• State and Local Governments: Involved in workforce boards, economic development, and outreach efforts.
• Child Care Advocates and Organizations: Including resource/referral agencies, tribal groups, and experts, who collaborate on education and promotion.
• Tax Preparers and Professionals: Benefit from the fact sheet to advise clients accurately.
• Congress: Receives reports to guide potential future legislation.

Notable Legal, Constitutional, or Political Implications

• Legal: Expands the IRS's mandate beyond enforcement and collection to include educational and facilitative roles, which aligns with its existing authority under the tax code but could require careful rulemaking to avoid overreach into non-tax areas. The exemption from competitive hiring streamlines appointment but maintains accountability through reporting.
• Constitutional: Falls within Congress's enumerated power to lay and collect taxes (Article I, Section 8), as it promotes utilization of existing tax benefits without creating new ones or infringing on states' rights.
• Political: Introduced bipartisanship (by Senators Hassan and Sullivan), emphasizing family support and economic productivity without new spending or mandates. Annual reports could highlight data gaps or inequities in benefit usage, potentially influencing broader child care policy debates.

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

Sponsor

Sen. Hassan, Margaret Wood [D-NH]

Cosponsors (1)

Sen. Sullivan, Dan [R-AK]

Recent Actions

• 2026-03-12: Read twice and referred to the Committee on Finance.
• 2026-03-12: Introduced in Senate

Bill Versions

• Child Care Tax Benefit Outreach and Assistance Act — issued 2026-03-12 — PDF (7 pages)