Title: Child and Dependent Care Modernization Act of 2019
Policy area: Taxation

Summary:
Child and Dependent Care Modernization Act of 2019
This bill increases the tax exclusion for employer-provided dependent care assistance and allows individuals to carry forward into the next taxable year unused flexible spending arrangement account balances

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3397 Introduced in House (IH)]

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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 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   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.

    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 ``Child and Dependent Care 
Modernization Act of 2019''.

SEC. 2. INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED 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 subparagraph (A) 
        and all that follows and inserting the following: ``shall not 
        exceed--
                            ``(i) $8,000 (half such dollar amount in 
                        the case of a separate return by a married 
                        individual) if there is 1 qualifying individual 
                        with respect to the taxpayer during 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 subparagraph:
                    ``(D) Qualifying individual.--For purposes of this 
                paragraph, the term `qualifying individual' 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) 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 subparagraph (A) shall each be 
                increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2019' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                Any increase determined under the preceding sentence 
                shall be rounded to the nearest multiple 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 BALANCE.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
is amended by redesignating subsections (k) and (l) as subsections (l) 
and (m), respectively, 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 
succeeding plan year may be carried forward to the succeeding plan 
year.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2019.
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