I 

114TH CONGRESS 

2D SESSION H. R. 5971 

To amend the Internal Revenue Code of 1986 to increase the amount excludable from gross income for dependent care assistance and dependent 

care flexible spending arrangements and to provide for a carryover of 

unused dependent care benefits in dependent care flexible spending arrangements. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 8, 2016 

Mr. SENSENBRENNER introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to increase 

the amount excludable from gross income for dependent 

care assistance and dependent care flexible spending arrangements and to provide for a carryover of unused 

dependent care benefits in dependent care flexible spending arrangements. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. INCREASE IN AMOUNT EXCLUDABLE FOR DE2 PENDENT CARE ASSISTANCE AND DEPEND3 ENT CARE FLEXIBLE SPENDING ARRANGE4 MENTS. 

5 (a) IN GENERAL.—Section 129(a)(2)(A) of the Inter6 nal Revenue Code of 1986 is amended by striking ‘‘$5,000 

($2,500’’ and inserting ‘‘$7,500 (1 7 ⁄2 such amount’’. 

8 (b) INFLATION ADJUSTMENT.—Section 129(a)(2) of 

9 such Code is amended by adding at the end the following 

10 new subparagraph: 

11 ‘‘(D) ADJUSTMENT FOR INFLATION.—In 

12 the case of any taxable year beginning after De13 cember 31, 2017, the $7,500 amount in sub14 paragraph (A) shall be increased by an amount 

15 equal to— 

16 ‘‘(i) such amount, multiplied by 

17 ‘‘(ii) the cost-of-living adjustment de18 termined under section 1(f)(3) for the cal19 endar year in which such taxable year be20 gins by substituting ‘calendar year 2016’ 

21 for ‘calendar year 1992’ in subparagraph 

22 (B) thereof. 

23 If any increase determined under this subpara24 graph is not a multiple of $50, such increase 

25 shall be rounded to the next lowest multiple of 

26 $50.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2016. 

4 SEC. 2. CARRYOVER OF UNUSED DEPENDENT CARE BENE5 FITS IN CAFETERIA PLANS AND FLEXIBLE 

6 SPENDING ARRANGEMENTS. 

7 (a) IN GENERAL.—Section 125(d) of the Internal 

8 Revenue Code of 1986 is amended by adding at the end 

9 the following new paragraph: 

10 ‘‘(3) CARRYOVER OF UNUSED DEPENDENT

11 CARE BENEFITS.—Notwithstanding paragraph 

12 (2)(A)— 

13 ‘‘(A) IN GENERAL.—For purposes of this 

14 title, a plan or other arrangement shall not fail 

15 to be treated as a cafeteria plan or dependent 

16 care flexible spending arrangement solely be17 cause qualified benefits under such plan include 

18 a dependent care flexible spending arrangement 

19 under which unused dependent care benefits 

20 may be carried forward to the succeeding plan 

21 year of such flexible spending arrangement. 

22 ‘‘(B) DEPENDENT CARE FLEXIBLE SPEND23 ING ARRANGEMENT.—For purposes of this 

24 paragraph, the term ‘dependent care flexible 

25 spending arrangement’ means a flexible spendVerDate Sep 11 2014 05:01 Sep 10, 2016 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5971.IH H5971

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1 ing arrangement (as defined in section 106(c)) 

2 that is a qualified benefit and only permits re3 imbursement for expenses for dependent care 

4 assistance. 

5 ‘‘(C) UNUSED HEALTH BENEFITS.—For 

6 purposes of this paragraph, with respect to an 

7 employee, the term ‘unused dependent care ben8 efits’ means the excess of— 

9 ‘‘(i) the maximum amount of reim10 bursement allowable to the employee dur11 ing a plan year under a dependent care 

12 flexible spending arrangement, taking into 

13 account any election by the employee, over 

14 ‘‘(ii) the actual amount of reimburse15 ment during such year under such ar16 rangement.’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to plan years ending after the date 

19 of the enactment of this Act. 

Æ 


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