I 

116TH CONGRESS 

1ST SESSION H. R. 3397 

To amend the Internal Revenue Code to increase the exclusion for employerprovided dependent care assistance and to allow individuals to carry 

forward dependent care flexible spending arrangement account balances. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 20, 2019 

Mrs. WAGNER (for herself, Mr. KING of New York, Mr. STIVERS, and Mr. 

RODNEY DAVIS of Illinois) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code to increase the exclusion for employer-provided dependent care assistance and 

to allow individuals to carry forward dependent care 

flexible spending arrangement account balances. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Child and Dependent 

5 Care Modernization Act of 2019’’. 


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1 SEC. 2. INCREASE IN EXCLUSION FOR EMPLOYER-PRO2 VIDED DEPENDENT CARE ASSISTANCE. 

3 (a) IN GENERAL.—Section 129(a)(2) of the Internal 

4 Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘shall not exceed’’ in subpara6 graph (A) and all that follows and inserting the fol7 lowing: ‘‘shall not exceed— 

8 ‘‘(i) $8,000 (half such dollar amount 

9 in the case of a separate return by a mar10 ried individual) if there is 1 qualifying in11 dividual with respect to the taxpayer dur12 ing such taxable year, or 

13 ‘‘(ii) $16,000 (half such dollar amount 

14 in the case of such a separate return) if 

15 there are 2 or more qualifying individuals 

16 with respect to the taxpayer during such 

17 taxable year.’’, and 

18 (2) by adding at the end the following new sub19 paragraph: 

20 ‘‘(D) QUALIFYING INDIVIDUAL.—For pur21 poses of this paragraph, the term ‘qualifying in22 dividual’ has the meaning given to such term 

23 under section 21(b)(1).’’. 

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

25 such Code is amended by redesignating subparagraph (C) 


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1 as subparagraph (D) and by inserting after subparagraph 

2 (B) the following new subparagraph: 

3 ‘‘(C) INFLATION ADJUSTMENT.—In the 

4 case of any taxable year beginning in a calendar 

5 year after 2020, the dollar amounts in subpara6 graph (A) shall each be increased by an amount 

7 equal to— 

8 ‘‘(i) such dollar amount, multiplied by 

9 ‘‘(ii) the cost-of-living adjustment de10 termined under section 1(f)(3) for the cal11 endar year in which the taxable year be12 gins, determined by substituting ‘calendar 

13 year 2019’ for ‘calendar year 2016’ in sub14 paragraph (A)(ii) thereof. 

15 Any increase determined under the preceding 

16 sentence shall be rounded to the nearest mul17 tiple of $100.’’. 

18 (c) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to taxable years beginning after 

20 December 31, 2019. 

21 SEC. 3. CARRYFORWARD FOR DEPENDENT CARE FLEXIBLE 

22 SPENDING ARRANGEMENT ACCOUNT BAL23 ANCE. 

24 (a) IN GENERAL.—Section 125 of the Internal Rev25 enue Code of 1986 is amended by redesignating subVerDate Sep 11 2014 22:51 Jun 26, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3397.IH H3397

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1 sections (k) and (l) as subsections (l) and (m), respec2 tively, and by inserting after subsection (j) the following 

3 new subsection: 

4 ‘‘(k) CARRYFORWARD.—For purposes of this title, a 

5 plan or other arrangement shall not fail to be treated as 

6 a cafeteria plan or flexible spending arrangement for a 

7 plan year merely because such arrangement provides that 

8 an amount not exceeding the amount with respect to such 

9 individual under section 129(a)(2) in effect for the suc10 ceeding plan year may be carried forward to the suc11 ceeding plan year.’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2019. 

Æ 


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