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—(i)in the case of a taxpayer whose modified adjusted gross income for such taxable year is less than $100,000 (twice such amount in the case of a joint return), $10,000 (half such amount in the case of a separate return by a married individual), and(ii)in any other case, $5,000 (half such amount in the case of a separate return by a married individual).

(b)

Modified adjusted gross income

Paragraph (2) of section 129(a) of such Code is amended by adding at the end the following new subparagraph:

(D)

Modified adjusted gross income

For purposes of this paragraph, the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.

(c)

Inflation adjustment

Paragraph (2) of section 129(a) of such Code, as amended by subsection (b), is amended by adding at the end the following new subparagraph:

(E)

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2014, each dollar amount contained in subparagraph (A) shall 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 2013 for calendar year 1992 in subparagraph (B) thereof.

Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2013.