Title: Working Parents Tax Relief Act
Policy area: Taxation

Summary:
Working Parents Tax Relief Act
This bill amends the Internal Revenue Code to: (1) increase from $5,000 to $7,500 (adjusted for inflation after 2017) the amount of employer-provided dependent care assistance that an employee may exclude from gross income, and (2) permit unused dependent care benefits in cafeteria plans and flexible spending arrangements to be carried forward to the succeeding plan year.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 386 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 386

   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 arrangements and to provide for a 
carryover of unused dependent care benefits in dependent care flexible 
                         spending arrangements.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 9, 2017

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 arrangements and to provide for a 
carryover of unused dependent care benefits in dependent care flexible 
                         spending arrangements.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Working Parents Tax Relief Act''.

SEC. 2. INCREASE IN AMOUNT EXCLUDABLE FOR DEPENDENT CARE ASSISTANCE AND 
              DEPENDENT CARE FLEXIBLE SPENDING ARRANGEMENTS.

    (a) In General.--Section 129(a)(2)(A) of the Internal 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 December 31, 2017, the 
                $7,500 amount in subparagraph (A) shall be increased by 
                an amount equal to--
                            ``(i) such amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which such taxable year begins 
                        by substituting `calendar year 2016' for 
                        `calendar year 1992' in subparagraph (B) 
                        thereof.
                If any increase determined under this subparagraph is 
                not a multiple of $50, such increase shall be rounded 
                to the next lowest multiple of $50.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 3. CARRYOVER OF UNUSED DEPENDENT CARE BENEFITS 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 because 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 spending 
                arrangement.--For purposes of this paragraph, the term 
                `dependent care flexible spending arrangement' means a 
                flexible spending arrangement (as defined in section 
                106(c)) that is a qualified benefit and only permits 
                reimbursement 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 benefits' means the excess of--
                            ``(i) the maximum amount of reimbursement 
                        allowable to the employee during a plan year 
                        under a dependent care flexible spending 
                        arrangement, taking into account any election 
                        by the employee, over
                            ``(ii) the actual amount of reimbursement 
                        during such year under such arrangement.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years ending after the date of the enactment of this Act.
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