The proposed bill aims to create income tax incentives for employers who provide dependent care assistance to their employees. It introduces a new section to the Arkansas Code, specifically 26-51-517, which establishes an income tax credit for eligible employers. An "eligible taxpayer" is defined as an employer with at least 50% of its employees earning an annual wage of less than $55,000. The tax credit is set at 50% of the amount excluded from the employer's income under federal law for dependent care assistance provided to employees. Employers must obtain an exemption certificate from the Arkansas Economic Development Commission to claim the credit, which is capped at a total of $3 million for the tax year and issued on a first-come, first-served basis.

Additionally, the bill outlines provisions for carrying forward unused tax credits for up to five years and allows charitable organizations to receive refunds for excess credits. The Arkansas Economic Development Commission is tasked with adjusting the wage threshold annually based on cost-of-living changes. The bill also permits eligible taxpayers to sell their tax credits, with specific regulations governing the sale and use of these credits. The effective date for the provisions of this act is set for tax years beginning on or after January 1, 2023.