Working Families Childcare Access Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 2714 To amend the Internal Revenue Code of 1986 to allow for the inclusion of additional expenses in dependent care FSAs, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 20, 2021 Mrs. WALORSKI (for herself, Mrs. MILLER of West Virginia, Mr. REED, Mr. HERN, and Mr. WENSTRUP) introduced the following bill; which was re- ferred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow for the inclusion of additional expenses in dependent care FSAs, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Working Families 4 Childcare Access Act of 2021’’ or the ‘‘WFCA Act of 5 2021’’. 6 VerDate Sep 11 2014 23:47 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2714.IH H2714 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2714 IH SEC. 2. ADDITIONAL EXPENSES INCLUDED IN DEPENDENT 1 CARE ASSISTANCE PROGRAMS. 2 (a) IN GENERAL.—Section 129(e) of the Internal 3 Revenue Code of 1986 is amended— 4 (1) in paragraph (1), by striking ‘‘or provision 5 of, those’’ and inserting ‘‘or provision of, qualified 6 adoption expenses (within the meaning of section 7 137(d)), qualified sports expenses, qualified tutoring 8 expenses, qualifying art expenses, or those’’, and 9 (2) by adding at the end the following new 10 paragraphs: 11 ‘‘(10) QUALIFIED SPORTS EXPENSES.—The 12 term ‘qualified sports expenses’ means expenses paid 13 or incurred for the participation or instruction of a 14 dependent in a program of physical exercise or phys- 15 ical activity. 16 ‘‘(11) QUALIFIED TUTORING EXPENSES.—The 17 term ‘qualified tutoring expenses’ means expenses 18 paid or incurred for the participation or instruction 19 of a dependent in virtual or in-person— 20 ‘‘(A) individual academic tutoring, or 21 ‘‘(B) small-group academic tutoring in a 22 group of four students or fewer. 23 ‘‘(12) QUALIFIED ART EXPENSES.—The term 24 ‘qualified art expenses’ means expenses paid or in- 25 VerDate Sep 11 2014 23:47 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2714.IH H2714 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2714 IH curred for the participation or instruction of a de- 1 pendent in a program of music or art.’’. 2 (b) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to taxable years beginning after 4 December 31, 2021. 5 SEC. 3. DEPENDENT CARE EXPENSES ALLOWED FOR CHIL- 6 DREN AND DEPENDENTS UP TO AGE 15. 7 (a) IN GENERAL.—Section 129(e)(1) of the Internal 8 Revenue Code of 1986, as amended by section 1, is 9 amended— 10 (1) by striking ‘‘or provision of, qualified adop- 11 tion expenses’’ and inserting ‘‘or provision of, with 12 respect to a qualifying individual, qualified adoption 13 expenses’’, 14 (2) by striking ‘‘The term’’ and inserting the 15 following: 16 ‘‘(A) IN GENERAL.—The term’’, and 17 (3) by adding at the end the following: 18 ‘‘(B) SPECIAL RULE.—For purposes of 19 subparagraph (A), the term ‘qualifying indi- 20 vidual’ has the meaning given in paragraph (1) 21 of section 21(b), except such paragraph shall be 22 applied by substituting ‘age 15’ for ‘age 13’.’’. 23 VerDate Sep 11 2014 23:47 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2714.IH H2714 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2714 IH (b) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 December 31, 2021. 3 SEC. 4. CARRY FORWARD OF UNUSED BENEFITS. 4 (a) IN GENERAL.—Section 129(d) of the Internal 5 Revenue Code of 1986 is amended by adding at the end 6 the following new paragraph: 7 ‘‘(10) BENEFIT CARRY FORWARD RULES.— 8 ‘‘(A) IN GENERAL.—A plan meets the re- 9 quirements of this paragraph if it provides for 10 the automatic carry forward from the close of 11 a plan year to the succeeding plan year of any 12 aggregate unused contributions totaling $20 or 13 greater. 14 ‘‘(B) SMALL BALANCES.—For purposes of 15 subparagraph (A), if an eligible employee car- 16 ries a balance of less than $20 at the end of a 17 plan year, such employee may elect to carry for- 18 ward such balance to the next plan year or, if 19 such employee makes no election, such balance 20 may be forfeited. 21 ‘‘(C) EXCLUSION FROM GROSS INCOME.— 22 No amount shall be included in gross income 23 under this chapter by reason of any carry for- 24 ward under this paragraph. 25 VerDate Sep 11 2014 23:47 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2714.IH H2714 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2714 IH ‘‘(D) COORDINATION LIMITS.—The max- 1 imum amount which may be contributed to a 2 dependent care assistance flexible spending ar- 3 rangement for any year to which an unused 4 amount is carried under this paragraph shall 5 not be reduced by such unused amount.’’. 6 (b) CONFORMING AMENDMENT.—Section 125(d)(2) 7 of such Code is amended by adding at the end the fol- 8 lowing new subparagraph: 9 ‘‘(E) EXCEPTION FOR DEPENDENT CARE 10 ASSISTANCE FLEXIBLE SPENDING ARRANGE- 11 MENTS.—Subparagraph (A) shall not apply to a 12 dependent care assistance flexible spending ar- 13 rangement which conforms to the benefit carry 14 forward rules of section 129(d)(10).’’. 15 (c) EFFECTIVE DATE.—The amendment made by 16 this section shall apply to taxable years beginning after 17 December 31, 2021. 18 SEC. 5. INCREASE OF BENEFITS FOR DEPENDENT CARE AS- 19 SISTANCE PROGRAMS. 20 (a) IN GENERAL.—Section 129(a)(2)(A) of the Inter- 21 nal Revenue Code of 1986 is amended by striking ‘‘$5,000 22 ($2,500’’ and inserting ‘‘$15,000 ($7,500’’. 23 VerDate Sep 11 2014 23:47 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2714.IH H2714 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2714 IH (b) EFFECTIVE DATE.—The amendment made by 1 this section shall apply to taxable years beginning after 2 December 31, 2021. 3 Æ VerDate Sep 11 2014 23:47 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H2714.IH H2714 kjohnson on DSK79L0C42PROD with BILLS