Congressman David Kustoff Introduces Legislation to Strengthen Employer-Supported Child Care for Working Families

WASHINGTON – Congressman David Kustoff (R-TN-08) introduced H.R. 10512, the Child Care Tax Benefit Outreach and Assistance Act, the House companion to bipartisan legislation introduced by Senators Dan Sullivan (R-AK) and Maggie Hassan (D-NH). The bill would help employers navigate and access federal tax benefits that support child care for working families. Congressman Kustoff has led congressional efforts to strengthen the Section 45F employer-provided child care tax credit, including provisions enacted through the One Big Beautiful Bill.

“Reliable child care supports working families and helps West Tennessee businesses recruit and retain employees,” said Congressman David Kustoff. “I worked to deliver the first major expansion of the employer-provided child care tax credit in more than two decades through the One Big Beautiful Bill. This bipartisan, budget-neutral legislation builds upon that work by giving businesses a dedicated resource to take advantage of these benefits and connect their employees with available options.”

A 2022 Government Accountability Office (GAO) report found that relatively few businesses claimed the Section 45F employer-provided child care tax credit. The GAO cited limited awareness of the credit and the complexity of establishing and administering child care benefits as barriers to wider use.

The Child Care Tax Benefit Outreach and Assistance Act would establish a Business Child Care Liaison within the Internal Revenue Service (IRS) to help address these barriers. The liaison would educate businesses about the Section 45F credit and Dependent Care Flexible Spending Accounts, which allow employees to set aside pretax income for eligible care expenses. The liaison would also help employers utilize these benefits and strengthen coordination among the IRS, businesses, and the child care sector.

Background:

In May 2025, Congressman Kustoff introduced H.R. 3155, the Child Care for American Families Act, to strengthen the Section 45F employer-provided child care tax credit and make it more useful for employers, particularly small businesses.
Key provisions from Congressman Kustoff’s legislation were included in H.R. 1, the One Big Beautiful Bill, which President Donald Trump signed into law on July 4, 2025.
Through the One Big Beautiful Bill, Congressman Kustoff secured the following improvements to the Section 45F credit:
For most employers, the credit increased from 25 percent to 40 percent of qualified child care expenditures, and the annual cap increased from $150,000 to $500,000;
Eligible small businesses can receive a 50 percent credit with an annual cap of $600,000; and
Employers may partner with outside organizations or other businesses to provide child care.

Click here to read the bill text.

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