On August 27, 2025, Juliana Reno and Lisa Tavares published “Employee Benefits in the One Big Beautiful Bill Act” in HR Daily Advisor. The following is an excerpt:
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the Act). The Act provides employers with a variety of tools to enhance their employee benefit offerings. In this article, we will focus on the most intriguing opportunities for change by employers.
The tax code gives employers two ways to provide nontaxable dependent care benefits for their employees. Employers can pay their employees’ dependent care expenses directly or alternatively, employers can arrange for dependent care flexible spending accounts (DCFSAs), funded by employee salary deductions. The maximum nontaxable dependent care benefit has long been fixed at $5,000 per year ($2,500 per year if the employee is married and filing separately). The Act increased the maximum benefit to $7,500 per year ($3,750 per year if married and filing separately).
Employers should consider amending their dependent care assistance programs to account for the higher benefit limit, effective January 1, 2026.
Click here to access the article.