I 

114TH CONGRESS 

2D SESSION H. R. 4867 

To amend the Internal Revenue Code of 1986 to provide further tax incentives 

for dependent care assistance. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 23, 2016 

Mr. KELLY of Pennsylvania (for himself and Ms. LINDA T. SA ́NCHEZ of California) 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 provide 

further tax incentives for dependent care assistance. 

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 ‘‘Working Families Re5 lief Act’’. 

6 SEC. 2. EXPANSION OF EXCLUSION FOR DEPENDENT CARE 

7 ASSISTANCE PROGRAMS. 

8 (a) EXPANSION.— 

9 (1) IN GENERAL.—Subparagraph (A) of section 

10 129(a)(2) of the Internal Revenue Code of 1986 is 


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1 amended by striking ‘‘shall not exceed $5,000 

2 ($2,500 in the case of a separate return by a mar3 ried individual).’’ and inserting ‘‘shall not exceed— 

4 ‘‘(i) except as provided in clause (ii), 

5 $10,500, and 

6 ‘‘(ii) in the case of a separate return 

by a married individual, 1 7 ⁄2 the amount in 

8 effect under clause (i).’’. 

9 (2) INFLATION ADJUSTMENT.—Paragraph (2) 

10 of section 129(a) of such Code is amended by adding 

11 at the end the following new subparagraph: 

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

13 the case of taxable years beginning after De14 cember 31, 2017, the $10,500 amount under 

15 subparagraph (A)(i) shall be increased by an 

16 amount equal to— 

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

18 ‘‘(ii) the cost-of-living adjustment de19 termined under section 1(f)(3) for the cal20 endar year in which the taxable year be21 gins, determined by substituting ‘calendar 

22 year 2016’ for ‘calendar year 1992’ in sub23 paragraph (B) thereof. 

24 If any amount as adjusted under the preceding 

25 sentence is not a multiple of $100, such amount 


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1 shall be rounded to the next lowest multiple of 

2 $100.’’. 

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

4 this section shall apply to amounts paid or incurred in tax5 able years beginning after December 31, 2016. 

6 SEC. 3. ALLOWANCE OF CREDIT FOR SMALL EMPLOYER DE7 PENDENT CARE ASSISTANCE PROGRAM 

8 START-UP COSTS. 

9 (a) IN GENERAL.—Section 45E of the Internal Rev10 enue Code of 1986 is amended— 

11 (1) by striking ‘‘pension plan’’ in subsection (a) 

12 and inserting ‘‘employee benefit’’, and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(f) APPLICATION TO DEPENDENT CARE ASSIST16 ANCE PROGRAMS.—For purposes of this section— 

17 ‘‘(1) an dependent care assistance program of 

18 an eligible employer which meets the requirements of 

19 section 129(d) shall be treated as an eligible em20 ployer plan, and 

21 ‘‘(2) this section (including the limitation under 

22 subsection (b)) shall be applied separately with re23 spect to any such dependent care assistance program 

24 of the eligible employer and other eligible employer 

25 plans of such eligible employer.’’. 


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1 (b) CONFORMING AMENDMENTS.— 

2 (1) Section 38(b)(14) of the Internal Revenue 

3 Code of 1986 is amended by striking ‘‘pension plan’’ 

4 and inserting ‘‘employee benefit’’. 

5 (2) The heading for section 45E of such Code 

6 is amended by striking ‘‘PENSION PLAN’’ and in7 serting ‘‘EMPLOYEE BENEFIT’’. 

8 (3) The table of sections for subpart D of part 

9 IV of subchapter A of chapter 1 of such Code is 

10 amended by striking ‘‘pension plan’’ in the item re11 lating to section 45E and inserting ‘‘employee ben12 efit’’. 

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

14 this section shall apply to costs paid or incurred in taxable 

15 years beginning after December 31, 2016, with respect to 

16 dependent care assistance programs first effective after 

17 such date. 

18 SEC. 4. CREDIT FOR MATCHING DEPENDENT CARE ASSIST19 ANCE PROGRAM CONTRIBUTIONS BY EM20 PLOYERS. 

21 (a) IN GENERAL.—Subpart D of part IV of sub22 chapter A of chapter 1 of the Internal Revenue Code of 

23 1986 is amended by inserting after section 45R the fol24 lowing new section: 


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1 ‘‘SEC. 45S. CREDIT FOR EMPLOYER DEPENDENT CARE AS2 SISTANCE PROGRAM MATCHING CONTRIBU3 TIONS. 

4 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

5 employer dependent care assistance matching contribution 

6 credit determined under this section for any taxable year 

7 is an amount equal to the lesser of— 

8 ‘‘(1) the amount of contributions made by the 

9 employer with respect to employees to a dependent 

10 care assistance program that meets the requirements 

11 of section 129(d), or 

12 ‘‘(2) the amount of contributions to such de13 pendent care assistance program elected by such em14 ployees under a cafeteria plan of the employer to 

15 which section 125 applies. 

16 ‘‘(b) LIMITATION.—The credit allowed under sub17 section (a) for any taxable year with respect to any em18 ployee shall not exceed $1,000. 

19 ‘‘(c) DEFINITIONS.—Any term used in this section 

20 which is used in section 129 shall have the meaning given 

21 such term under section 129.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) Section 38(b) of the Internal Revenue Code 

24 of 1986 is amended by striking ‘‘plus’’ at the end of 

25 paragraph (35), by striking the period at the end of 


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1 paragraph (36) and inserting ‘‘, plus’’, and by add2 ing at the end the following new paragraph: 

3 ‘‘(37) the employer dependent care assistance 

4 matching contribution credit determined under sec5 tion 45S(a).’’. 

6 (2) The table of sections for subpart D of part 

7 IV of subchapter A of chapter 1 of the Internal Rev8 enue Code of 1986 is amended by inserting after the 

9 item relating to section 45R the following new item: 

‘‘Sec. 45S. Credit for employer dependent care assistance program matching 

contributions.’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2016. 

Æ 


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