I 
114TH CONGRESS 
2D SESSION 
H. R. 5971 
To amend the Internal Revenue Code of 1986 to increase the amount exclud-
able 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 ar-
rangements. 
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 ar-
rangements and to provide for a carryover of unused 
dependent care benefits in dependent care flexible spend-
ing arrangements. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. INCREASE IN AMOUNT EXCLUDABLE FOR DE-
PENDENT CARE ASSISTANCE AND DEPEND-
ENT CARE FLEXIBLE SPENDING ARRANGE-
MENTS. 
(a) IN GENERAL.—Section 129(a)(2)(A) of the Inter-
nal Revenue Code of 1986 is amended by striking ‘‘$5,000 
($2,500’’ and inserting ‘‘$7,500 (1⁄2 such amount’’. 
(b) INFLATION ADJUSTMENT.—Section 129(a)(2) of 
such Code is amended by adding at the end the following 
new subparagraph: 
‘‘(D) ADJUSTMENT
FOR
INFLATION.—In 
the case of any taxable year beginning after De-
cember 31, 2017, the $7,500 amount in sub-
paragraph (A) shall be increased by an amount 
equal to— 
‘‘(i) such amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which such taxable year be-
gins by substituting ‘calendar year 2016’ 
for ‘calendar year 1992’ in subparagraph 
(B) thereof. 
If any increase determined under this subpara-
graph is not a multiple of $50, such increase 
shall be rounded to the next lowest multiple of 
$50.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
SEC. 2. CARRYOVER OF UNUSED DEPENDENT CARE BENE-
FITS IN CAFETERIA PLANS AND FLEXIBLE 
SPENDING ARRANGEMENTS. 
(a) IN GENERAL.—Section 125(d) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(3) CARRYOVER
OF
UNUSED
DEPENDENT 
CARE
BENEFITS.—Notwithstanding 
paragraph 
(2)(A)— 
‘‘(A) IN GENERAL.—For purposes of this 
title, a plan or other arrangement shall not fail 
to be treated as a cafeteria plan or dependent 
care flexible spending arrangement solely be-
cause qualified benefits under such plan include 
a dependent care flexible spending arrangement 
under which unused dependent care benefits 
may be carried forward to the succeeding plan 
year of such flexible spending arrangement. 
‘‘(B) DEPENDENT CARE FLEXIBLE SPEND-
ING
ARRANGEMENT.—For purposes of this 
paragraph, the term ‘dependent care flexible 
spending arrangement’ means a flexible spend-
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ing arrangement (as defined in section 106(c)) 
that is a qualified benefit and only permits re-
imbursement for expenses for dependent care 
assistance. 
‘‘(C) UNUSED
HEALTH
BENEFITS.—For 
purposes of this paragraph, with respect to an 
employee, the term ‘unused dependent care ben-
efits’ means the excess of— 
‘‘(i) the maximum amount of reim-
bursement allowable to the employee dur-
ing a plan year under a dependent care 
flexible spending arrangement, taking into 
account any election by the employee, over 
‘‘(ii) the actual amount of reimburse-
ment during such year under such ar-
rangement.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years ending after the date 
of the enactment of this Act. 
Æ 
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