Some things Arizona employers should know about the One Big Beautiful Bill Act

David T. Barton

Submitted photo/Fennemore

David Sieck

Submitted photo/Fennemore

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On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act into law. This budget reconciliation legislation includes several provisions that employers should know about. Here’s a summary for those who don’t want to read the bill’s nearly 900 pages. 

Enhanced employer-provided childcare credit

The bill increases the tax credit for employers who provide childcare assistance to $500,000 ($600,000 in the case of an eligible small business) from the previous $150,000 threshold, thus helping address the challenges facing working parents. The measure is intended to encourage employers to add childcare benefits in an effort to reduce absenteeism and increase retention.

Paid family and medical leave tax credit

The bill extends and enhances the tax credit for employers offering paid family and medical leave.  Again, the goal is to encourage employers to provide or expand paid leave benefits, with the aim of promoting families and improving talent attraction and retention.

Expanded 529 account usage

The bill allows 529 education savings plans to cover expenses for postsecondary industry-recognized credentialing programs for employees and the related continuing education to maintain the credential.  The goal is to support employee upskilling and reskilling initiatives, aligning workforce skills with evolving business needs.

Dependent care FSA increase

In addition to expanding the employer-provided childcare credit, the bill also increases the dependent care FSA limit for employees to $7,500 ($3,750 for married couples filing separately). This change provides employees with the ability to set aside a greater amount of pre-tax dollars for childcare, with the goal of reducing the childcare cost burden on working parents.

Permanent employer student loan repayment exclusion

The bill makes permanent the exclusion of employer-paid student loan repayments from employees’ taxable income (I.R.C. Section 127), with adjustments for inflation. This is employer-funded student loan forgiveness and is a valuable benefit to employees, aiding in recruitment and retention efforts.

Summary — pun intended

The bill is so large that even Congress got a summary — and we have provided a link here just in case you would like to read more:

H.R.1 – 119th Congress (2025-2026): One Big Beautiful Bill Act | Congress.gov | Library of Congress

Editor’s note: David T. Barton and David Sieck are attorneys in Fennemore’s Employment & Labor practice group. Please send your comments to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.