Texas House Bill HB864

Texas 2021 - 87th Regular

Caption

Relating to a franchise tax credit pilot program for taxable entities that contribute to an employee dependent care flexible spending account.

Impact

The bill could have significant implications for state tax laws by creating incentives for businesses to enhance their employee benefits programs. It is designed to alleviate the financial burden of dependent care on lower-wage workers, which could, in turn, improve employee retention and job satisfaction. By promoting the use of flexible spending accounts, the bill encourages a cultural shift towards greater employer responsibility in employee care solutions.

Summary

House Bill 864 introduces a franchise tax credit pilot program aimed at encouraging taxable entities to contribute to employees' dependent care flexible spending accounts. This program allows eligible employers to receive a tax credit for their contributions, thereby promoting employee welfare and addressing care costs for dependents. Taxable entities qualifying for the credit must have an average of no more than 500 employees and contribute to the accounts of employees earning an annual salary of $65,000 or less.

Contention

Notably, there may be debates surrounding the necessity and effectiveness of such a tax credit program. Critics might argue that while the intention is to support low-income employees, it does not address the broader structural issues related to childcare access and affordability. Furthermore, since the program is limited to small businesses with fewer than 500 employees, concerns may arise regarding its equitable reach across different sectors of the economy.