OBBBA Overview
What is OBBBA?
The Ordinary and Necessary Business Expense Benefit Analysis (OBBBA) is a comprehensive methodology for evaluating and documenting employer-provided childcare benefits as legitimate business expenses under IRC §162.
This analysis framework helps employers justify their childcare expenditures by demonstrating the direct business benefits and return on investment from providing childcare services to employees.
Key Components of OBBBA
1. Business Purpose Documentation
- Demonstrating how childcare supports core business operations
- Documenting employee recruitment and retention benefits
- Proving productivity improvements and reduced absenteeism
- Establishing competitive advantage in labor markets
2. Cost-Benefit Analysis
- Quantifying direct and indirect cost savings
- Measuring reduction in turnover costs
- Calculating productivity gains
- Assessing impact on workplace morale and culture
3. Reasonableness Assessment
- Comparing costs to industry standards
- Evaluating appropriateness of expenditure levels
- Documenting market rate analysis
- Justifying scale and scope of services
4. Compliance Framework
- Ensuring alignment with IRS regulations
- Meeting state and local licensing requirements
- Maintaining proper documentation standards
- Establishing audit-ready record keeping
Benefits of OBBBA Implementation
✓ Tax Benefits
Maximize §45F credit eligibility and ensure proper deduction of childcare expenses as ordinary business costs.
✓ Audit Protection
Maintain comprehensive documentation that withstands IRS scrutiny and supports your tax positions.
✓ Strategic Planning
Use data-driven insights to optimize childcare program design and maximize ROI.
✓ Risk Management
Identify and mitigate compliance risks before they become costly problems.
OBBBA Process Steps
- Initial Assessment: Evaluate current childcare programs and identify documentation gaps
- Data Collection: Gather financial records, employee metrics, and operational data
- Analysis: Perform comprehensive cost-benefit and reasonableness analysis
- Documentation: Prepare detailed reports and supporting materials
- Implementation: Establish ongoing compliance and monitoring systems
- Review: Conduct annual reviews and updates to maintain compliance
Industries That Benefit Most
Healthcare
Hospitals & medical facilities
Manufacturing
Production & distribution centers
Corporate
Large employers with on-site facilities
Education
Universities & school districts
Government
Federal, state & local agencies
Technology
Tech companies & startups
Get Your OBBBA Analysis
Strickland Childcare Consulting specializes in comprehensive OBBBA assessments that protect your tax positions and maximize your childcare program benefits. Our expert team will guide you through the entire process.