Title: Investing in Your Family's Future Act
Policy area: Taxation

Summary:
Investing in Your Family's Future Act

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5837 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 5837

To amend the Internal Revenue Code of 1986 to permit treatment of child 
 care payments as elective deferrals for purposes of employer matching 
                 contributions, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 10, 2020

  Mrs. Wagner (for herself and Mr. Jeffries) 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 permit treatment of child 
 care payments as elective deferrals for purposes of employer matching 
                 contributions, and for other purposes.

    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 ``Investing in Your Family's Future 
Act''.

SEC. 2. TREATMENT OF CHILD CARE PAYMENTS AS ELECTIVE DEFERRALS FOR 
              PURPOSES OF MATCHING CONTRIBUTIONS.

    (a) In General.--Subparagraph (A) of section 401(m)(4) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of clause (i), by striking the period at the end of clause (ii) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(iii) subject to the requirements of 
                        paragraph (13), any employer contribution made 
                        to a defined contribution plan on behalf of an 
                        employee on account of a qualified child care 
                        payment.''.
    (b) Qualified Child Care Payment.--Paragraph (4) of section 401(m) 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph:
                    ``(D) Qualified child care payment.--The term 
                `qualified child care payment' means any payment by an 
                employee of employment-related expenses (within the 
                meaning of section 21(b)(2)), but only to the extent 
                such payments in the aggregate for the year do not 
                exceed an amount equal to
                            ``(i) the limitation applicable under 
                        section 402(g) for the year (or, if lesser, the 
                        employee's compensation (as defined in section 
                        415(c)(3)) for the year), reduced by
                            ``(ii) the elective deferrals made by the 
                        employee for such year.''.
    (c) Matching Contributions for Qualified Child Care Payments.--
Subsection (m) of section 401 of the Internal Revenue Code of 1986 is 
amended by redesignating paragraph (13) as paragraph (14), and by 
inserting after paragraph (12) the following new paragraph:
            ``(13) Matching contributions for qualified child care 
        payments.--
                    ``(A) In general.--For purposes of paragraph 
                (4)(A)(iii), an employer contribution made to a defined 
                contribution plan on account of a qualified child care 
                payment shall be treated as a matching contribution for 
                purposes of this title if--
                            ``(i) the plan provides matching 
                        contributions on account of elective deferrals 
                        at the same rate as contributions on account of 
                        qualified child care payments,
                            ``(ii) the plan provides matching 
                        contributions on account of qualified child 
                        care payments only on behalf of employees 
                        otherwise eligible to make elective deferrals, 
                        and
                            ``(iii) under the plan, all employees 
                        eligible to receive matching contributions on 
                        account of elective deferrals are eligible to 
                        receive matching contributions on account of 
                        qualified child care payments.
                    ``(B) Treatment for purposes of nondiscrimination 
                rules, etc.--
                            ``(i) Nondiscrimination rules.--For 
                        purposes of subparagraph (A)(iii), subsection 
                        (a)(4), and section 410(b), matching 
                        contributions described in paragraph 
                        (4)(A)(iii) shall not fail to be treated as 
                        available to an employee solely because such 
                        employee does not have employment-related 
                        expenses (within the meaning of section 
                        21(b)(2)).
                            ``(ii) Child care payments not treated as 
                        plan contribution.--Except as provided in 
                        clause (iii), a qualified child care payment 
                        shall not be treated as a contribution to a 
                        plan under this title.
                            ``(iii) Matching contribution rules.--
                        Solely for purposes of meeting the requirements 
                        of paragraph (11)(B) or (12) of this 
                        subsection, or paragraph (11)(B)(i)(II), 
                        (12)(B), or (13)(D) of subsection (k), a plan 
                        may treat a qualified child care payment as an 
                        elective deferral or an elective contribution, 
                        whichever is applicable.''.
    (d) Simple Retirement Accounts.--Paragraph (2) of section 408(p) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(F) Matching contributions for qualified child 
                care payments.--
                            ``(i) In general.--Subject to the rules of 
                        clause (iii), an arrangement shall not fail to 
                        be treated as meeting the requirements of 
                        subparagraph (A)(iii) solely because under the 
                        arrangement, solely for purposes of such 
                        subparagraph, qualified child care payments are 
                        treated as amounts elected by the employee 
                        under subparagraph (A)(i)(I) to the extent such 
                        payments do not exceed--
                                    ``(I) the applicable dollar amount 
                                under subparagraph (E) (after 
                                application of section 414(v)) for the 
                                year (or, if lesser, the employee's 
                                compensation (as defined in section 
                                415(c)(3)) for the year), reduced by
                                    ``(II) any other amounts elected by 
                                the employee under subparagraph 
                                (A)(i)(I) for the year.
                            ``(ii) Qualified child care payment.--For 
                        purposes of this subparagraph, the term 
                        `qualified child care payment' means any 
                        payment by an employee of employment-related 
                        expenses (within the meaning of section 
                        21(b)(2)).
                            ``(iii) Applicable rules.--Clause (i) shall 
                        apply to an arrangement only if, under the 
                        arrangement--
                                    ``(I) matching contributions on 
                                account of qualified child care 
                                payments are provided only on behalf of 
                                employees otherwise eligible to elect 
                                contributions under subparagraph 
                                (A)(i)(I), and
                                    ``(II) all employees otherwise 
                                eligible to participate in the 
                                arrangement are eligible to receive 
                                matching contributions on account of 
                                qualified child care payments.''.
    (e) 403(b) Plans.--Subparagraph (A) of section 403(b)(12) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following: ``The fact that the employer offers matching contributions 
on account of qualified child care payments as described in section 
401(m)(13) shall not be taken into account in determining whether the 
arrangement satisfies the requirements of clause (ii) (and any 
regulation thereunder).''.
    (f) 457(b) Plans.--Subsection (b) of section 457 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: ``A 
plan which is established and maintained by an employer which is 
described in subsection (e)(1)(A) shall not be treated as failing to 
meet the requirements of this subsection solely because the plan, or 
another plan maintained by the employer which meets the requirements of 
section 401(a), provides for matching contributions on account of 
qualified child care payments as described in section 401(m)(13).''.
    (g) Regulatory Authority.--The Secretary shall prescribe 
regulations for purposes of implementing the amendments made by this 
section, including regulations--
            (1) permitting a plan to make matching contributions for 
        qualified child care payments, as defined in sections 
        401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 
        1986, as added by this section, at a different frequency than 
        matching contributions are otherwise made under the plan, 
        provided that the frequency is not less than annually;
            (2) permitting employers to establish reasonable procedures 
        to claim matching contributions for such qualified child care 
        payments under the plan, including an annual deadline (not 
        earlier than 3 months after the close of each plan year) by 
        which a claim must be made; and
            (3) promulgating model amendments which plans may adopt to 
        implement matching contributions on such qualified child care 
        payments for purposes of sections 401(m), 408(p), 403(b), and 
        457(b) of the Internal Revenue Code of 1986.
    (h) Effective Date.--The amendments made by this section shall 
apply to contributions made for years beginning after December 31, 
2020.
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