HB 2740 creates a franchise tax credit for businesses that provide paid parental leave to employees in Texas. The tax credit is based on a percentage of the employer’s costs for providing paid parental leave, with smaller businesses receiving a higher percentage. Employers with 500 or fewer employees can claim 100% of the cost, those with 500 to 1,500 employees can claim 50%, and those with 1,500 or more employees can claim 10%. The credit applies only to employees based in Texas and covers leave following childbirth, adoption, or placement of a foster child under one year old. The bill requires the comptroller to track and publish data on the credits claimed. The law applies to tax reports due on or after January 1, 2026​.