116 HR 3397 IH: Child and Dependent Care Modernization Act of 2019 U.S. House of Representatives 2019-06-20 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 116th CONGRESS1st Session H. R. 3397 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.

1.

Short title

This Act may be cited as the Child and Dependent Care Modernization Act of 2019.

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.

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.