Title: Child Care Flex Spending Act of 2019
Policy area: Taxation

Summary:
Child Care Flex Spending Act of 2019
This bill increases the amount that employees may exclude from their gross income for employer-provided dependent care assistance.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2230 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 2230

   To amend the Internal Revenue Code of 1986 to increase the dollar 
   limitation on the exclusion for employer-provided dependent care 
                              assistance.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 23, 2019

  Mr. Murphy introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to increase the dollar 
   limitation on the exclusion for employer-provided dependent care 
                              assistance.

    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 Care Flex Spending Act of 
2019''.

SEC. 2. INCREASE IN DOLLAR LIMITATION ON EXCLUSION FOR EMPLOYER-
              PROVIDED DEPENDENT CARE ASSISTANCE.

    (a) In General.--Subparagraph (A) of section 129(a)(2) of the 
Internal Revenue Code of 1986 is amended by striking ``shall not 
exceed'' and all that follows and inserting the following: ``shall not 
exceed the greater of--
                            ``(i) $5,000, or
                            ``(ii) $10,000, reduced (but not below 
                        zero) by 5 cents for each dollar (or fraction 
                        thereof) by which the employee's earned income 
                        for the taxable year exceeds $50,000.
                In the case of a separate return by a married 
                individual, the amount determined under the preceding 
                sentence shall be reduced by one-half.''.
    (b) Inflation Adjustment.--Paragraph (2) of section 129(a) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(D) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2020, 
                the $5,000 and $10,000 amounts contained 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 $50.''.
    (c) Employer Safe Harbor for Reporting.--The Secretary of the 
Treasury (or the Secretary's delegate) shall promulgate regulations or 
other guidance to assist an employer in determining, for purposes of 
section 3401(a)(18) of the Internal Revenue Code of 1986, the amount 
(if any) in excess of $5,000 which it is reasonable to believe an 
employee will be able to exclude under section 129 of such Code.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2019.
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