I 108th CONGRESS 2d Session H. R. 4372 IN THE HOUSE OF REPRESENTATIVES May 17, 2004 Mr. Cantor (for himself and Mr. Kennedy of Minnesota) 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 provide for the carryforward of $500 of unused benefits in cafeteria plans and flexible spending arrangements for dependent care assistance.

1.

Short title

This Act may be cited as the &short-title1;.

2.

Carryforward of unused benefits in cafeteria plans and flexible spending arrangements for dependent care assistance

(a)

In general

Section 125 of the Internal Revenue Code of 1986 (relating to cafeteria plans) is amended by redesignating subsections (h) and (i) as subsections (i) and (j), respectively, and by inserting after subsection (g) the following new subsection: (h)

Carryforward of certain unused benefits for dependent care

(1)

In general

For purposes of this title, a plan or other arrangement shall not fail to be treated as a cafeteria plan solely because qualified benefits under such plan include a dependent care flexible spending arrangement under which not more than $500 of unused dependent care benefits may be carried forward to the succeeding plan year of such dependent care flexible spending arrangement. (2)

Dependent care flexible spending arrangement

For purposes of this subsection, 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 which meets the requirements of section 129(d). (3)

Unused dependent care benefits

For purposes of this subsection, with respect to an employee, the term unused dependent care benefits means the excess of— (A)the maximum amount of reimbursement allowable to the employee for a plan year under a dependent care flexible spending arrangement, over (B)the actual amount of reimbursement for such year under such arrangement.. (b)

Effective date

The amendments made by subsection (a) shall apply to taxable years beginning after December 31, 2003.