Arkansas Senate Bill SB352

Arkansas 2023 Regular Session

• Introduced: 3/2/23
• Refer: 3/2/23
• Refer: 3/27/23
• Failed: 5/1/23

Caption

To Create Income Tax Incentives For Employer-based Dependent Care Assistance; And To Create An Income Tax Credit For Employer Payments Related To Dependent Care Assistance.

Impact

If enacted, SB352 would amend the existing Arkansas Code to allow eligible employers, defined as those with at least 50% of employees earning less than $55,000 annually, to claim a tax credit amounting to 50% of qualifying dependent care expenditures. This provision signifies a recognition of the importance of dependent care in improving employee satisfaction and retention, while also promoting a healthier work-life balance. Additionally, the legislation caps the total tax credits that can be issued at $3 million per tax year, which could limit the extent of its economic impact while still fostering a supportive environment for working families.

Summary

Senate Bill 352 (SB352) aims to create income tax incentives specifically for employer-based dependent care assistance. The proposed legislation seeks to establish an income tax credit for employers who provide dependent care assistance to their employees. This bill is designed to encourage more employers to offer support in navigating the costs associated with dependent care, thereby potentially reducing the financial burden on families and encouraging workforce participation, particularly among parents.

Sentiment

The sentiment surrounding SB352 is largely positive, with advocates arguing that the bill represents a substantial step towards supporting working families. Supporters see it as a vital investment in the workforce that addresses an immediate need for child care assistance. However, there could be concerns regarding the financing of such tax incentives and whether they would deliver significant benefits to the intended demographic. Overall, the general sentiment is that it is a progressive measure, although it also invites scrutiny regarding its implementation and potential limitations.

Contention

Debate surrounding SB352 may center on its financial implications for the state budget, especially considering the capped amount of total tax credits. Critics could argue that the bill does not go far enough in addressing the broader structural issues related to child care accessibility and affordability. Furthermore, the parameters set for eligibility, such as income thresholds and the cap on total credits, may not sufficiently cover all employers who wish to participate, potentially restricting the bill’s overall reach and effectiveness.