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 Cali-
fornia) 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. 
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 ‘‘Working Families Re-
lief Act’’. 
SEC. 2. EXPANSION OF EXCLUSION FOR DEPENDENT CARE 
ASSISTANCE PROGRAMS. 
(a) EXPANSION.— 
(1) IN GENERAL.—Subparagraph (A) of section 
129(a)(2) of the Internal Revenue Code of 1986 is 
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amended by striking ‘‘shall not exceed $5,000 
($2,500 in the case of a separate return by a mar-
ried individual).’’ and inserting ‘‘shall not exceed— 
‘‘(i) except as provided in clause (ii), 
$10,500, and 
‘‘(ii) in the case of a separate return 
by a married individual, 1⁄2 the amount in 
effect under clause (i).’’. 
(2) INFLATION ADJUSTMENT.—Paragraph (2) 
of section 129(a) of such Code is amended by adding 
at the end the following new subparagraph: 
‘‘(D) ADJUSTMENT
FOR
INFLATION.—In 
the case of taxable years beginning after De-
cember 31, 2017, the $10,500 amount under 
subparagraph (A)(i) shall 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 2016’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
If any amount as adjusted under the preceding 
sentence is not a multiple of $100, such amount 
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shall be rounded to the next lowest multiple of 
$100.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2016. 
SEC. 3. ALLOWANCE OF CREDIT FOR SMALL EMPLOYER DE-
PENDENT 
CARE 
ASSISTANCE 
PROGRAM 
START-UP COSTS. 
(a) IN GENERAL.—Section 45E of the Internal Rev-
enue Code of 1986 is amended— 
(1) by striking ‘‘pension plan’’ in subsection (a) 
and inserting ‘‘employee benefit’’, and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) APPLICATION TO DEPENDENT CARE ASSIST-
ANCE PROGRAMS.—For purposes of this section— 
‘‘(1) an dependent care assistance program of 
an eligible employer which meets the requirements of 
section 129(d) shall be treated as an eligible em-
ployer plan, and 
‘‘(2) this section (including the limitation under 
subsection (b)) shall be applied separately with re-
spect to any such dependent care assistance program 
of the eligible employer and other eligible employer 
plans of such eligible employer.’’. 
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(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b)(14) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘pension plan’’ 
and inserting ‘‘employee benefit’’. 
(2) The heading for section 45E of such Code 
is amended by striking ‘‘PENSION PLAN’’ and in-
serting ‘‘EMPLOYEE BENEFIT’’. 
(3) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
amended by striking ‘‘pension plan’’ in the item re-
lating to section 45E and inserting ‘‘employee ben-
efit’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to costs paid or incurred in taxable 
years beginning after December 31, 2016, with respect to 
dependent care assistance programs first effective after 
such date. 
SEC. 4. CREDIT FOR MATCHING DEPENDENT CARE ASSIST-
ANCE PROGRAM CONTRIBUTIONS BY EM-
PLOYERS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 45R the fol-
lowing new section: 
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‘‘SEC. 45S. CREDIT FOR EMPLOYER DEPENDENT CARE AS-
SISTANCE PROGRAM MATCHING CONTRIBU-
TIONS. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
employer dependent care assistance matching contribution 
credit determined under this section for any taxable year 
is an amount equal to the lesser of— 
‘‘(1) the amount of contributions made by the 
employer with respect to employees to a dependent 
care assistance program that meets the requirements 
of section 129(d), or 
‘‘(2) the amount of contributions to such de-
pendent care assistance program elected by such em-
ployees under a cafeteria plan of the employer to 
which section 125 applies. 
‘‘(b) LIMITATION.—The credit allowed under sub-
section (a) for any taxable year with respect to any em-
ployee shall not exceed $1,000. 
‘‘(c) DEFINITIONS.—Any term used in this section 
which is used in section 129 shall have the meaning given 
such term under section 129.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b) of the Internal Revenue Code 
of 1986 is amended by striking ‘‘plus’’ at the end of 
paragraph (35), by striking the period at the end of 
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