16 Sep 2025 Ensuring Success of Child Care and PFML Tax Credits in Children, Paid Parental Leave
Caregiving responsibilities remain persistent barriers to workforce participation for many parents, particularly women. But access to important benefits offered by employers, such as child care and paid family leave, remains low.
On September 16, 2025, BPC Action sent a letter to Treasury Secretary Scott Bessent outlining implementation recommendations to maximize two working families tax credits that were changed as part of H.R. 1, the One Big Beautiful Bill Act (OBBB). These two business tax credits—the Employer Provided Child Care Credit (45F) and the Paid Family and Medical Leave Tax Credit (45S)—have the potential to tremendously impact businesses’ ability to support employees and expand families’ access to these critical workplace supports, ultimately bolstering families, local communities, and the broader economy.
To ensure the future success of these credits, the administration should consider the following recommendations to ensure smooth implementation for businesses.
1. Clarify outstanding regulatory questions expeditiously to ensure that businesses can increase access to child care and paid family leave support for workers. Maintaining a public-facing FAQ, among other resources, that answers regulatory questions should be readily available to businesses.
2. Develop targeted outreach and educational materials for businesses to better understand how to access these credits. Too many businesses are unaware that these credits exist, hindering their effectiveness. Developing public-facing materials that clearly explain how the credits work, how employers can utilize them to provide greater benefits to workers, and frequently asked questions guidance would greatly benefit businesses seeking to claim these credits.
3. Coordinate with other federal agencies to disseminate information to increase awareness, particularly among small businesses. Working with other agencies, such as the IRS, Department of Labor, and Small Business Administration, among others, to disseminate information to business entities and direct them to the appropriate channels for information would increase awareness of these credits.
4. Continue to understand the impact of these two credits and barriers to uptake. GAO previously conducted a study to better understand the efficacy of the 45F credit, and the reconciliation bill made great strides to implement several of the proposed changes. The Department should monitor the usage and success of targeted outreach and the resulting impacts on credit take-up to ensure that employers successfully access benefits.
Read the full letter here.
