I 
116TH CONGRESS 
1ST SESSION H. R. 3397 
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. 
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 re-
ferred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code to increase the exclu-
sion for employer-provided dependent care assistance and 
to allow individuals to carry forward dependent care 
flexible spending arrangement account balances. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Child and Dependent 
Care Modernization Act of 2019’’. 
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SEC. 2. INCREASE IN EXCLUSION FOR EMPLOYER-PRO-
VIDED DEPENDENT CARE ASSISTANCE. 
(a) IN GENERAL.—Section 129(a)(2) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘shall not exceed’’ in subpara-
graph (A) and all that follows and inserting the fol-
lowing: ‘‘shall not exceed— 
‘‘(i) $8,000 (half such dollar amount 
in the case of a separate return by a mar-
ried individual) if there is 1 qualifying in-
dividual with respect to the taxpayer dur-
ing such taxable year, or 
‘‘(ii) $16,000 (half such dollar amount 
in the case of such a separate return) if 
there are 2 or more qualifying individuals 
with respect to the taxpayer during such 
taxable year.’’, and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(D) QUALIFYING INDIVIDUAL.—For pur-
poses of this paragraph, the term ‘qualifying in-
dividual’ has the meaning given to such term 
under section 21(b)(1).’’. 
(b) INFLATION ADJUSTMENT.—Section 129(a)(2) of 
such Code is amended by redesignating subparagraph (C) 
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as subparagraph (D) and by inserting after subparagraph 
(B) the following new subparagraph: 
‘‘(C) INFLATION
ADJUSTMENT.—In the 
case of any taxable year beginning in a calendar 
year after 2020, the dollar amounts in subpara-
graph (A) shall each be increased by an amount 
equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2019’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
Any increase determined under the preceding 
sentence shall be rounded to the nearest mul-
tiple of $100.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
SEC. 3. CARRYFORWARD FOR DEPENDENT CARE FLEXIBLE 
SPENDING ARRANGEMENT ACCOUNT BAL-
ANCE. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 is amended by redesignating sub-
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sections (k) and (l) as subsections (l) and (m), respec-
tively, and by inserting after subsection (j) the following 
new subsection: 
‘‘(k) CARRYFORWARD.—For purposes of this title, a 
plan or other arrangement shall not fail to be treated as 
a cafeteria plan or flexible spending arrangement for a 
plan year merely because such arrangement provides that 
an amount not exceeding the amount with respect to such 
individual under section 129(a)(2) in effect for the suc-
ceeding plan year may be carried forward to the suc-
ceeding plan year.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
Æ 
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