Working Families Relief Act

I 116TH CONGRESS 1ST SESSION H. R. 2879 To amend the Internal Revenue Code of 1986 to provide further tax incentives for dependent care assistance. IN THE HOUSE OF REPRESENTATIVES MAY 21, 2019 Ms. SA´NCHEZ (for herself and Mr. KELLY of Pennsylvania) 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 further tax incentives for dependent care assistance. 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 Re- 4 lief Act’’. 5 SEC. 2. EXPANSION OF EXCLUSION FOR DEPENDENT CARE 6 ASSISTANCE PROGRAMS. 7 (a) IN GENERAL.—Section 129(a)(2)(A) of the Inter- 8 nal Revenue Code of 1986 is amended by striking ‘‘shall 9 not exceed $5,000 ($2,500 in the case of a separate return 10 VerDate Sep 11 2014 03:04 Jun 05, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2879.IH H2879 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 2879 IH by a married individual).’’ and inserting ‘‘shall not ex- 1 ceed— 2 ‘‘(i) except as provided in clause (ii), 3 $10,500, and 4 ‘‘(ii) in the case of a separate return 5 by a married individual, 1⁄2 the amount in 6 effect for the taxable year under clause 7 (i).’’. 8 (b) INFLATION ADJUSTMENT.—Section 129(a)(2) of 9 such Code is amended by adding at the end the following 10 new subparagraph: 11 ‘‘(D) ADJUSTMENT FOR INFLATION.—In 12 the case of taxable years beginning after De- 13 cember 31, 2020, the $10,500 amount under 14 subparagraph (A)(i) shall be increased by an 15 amount equal to— 16 ‘‘(i) such dollar amount, multiplied by 17 ‘‘(ii) the cost-of-living adjustment de- 18 termined under section 1(f)(3) for the cal- 19 endar year in which the taxable year be- 20 gins, determined by substituting ‘calendar 21 year 2019’ for ‘calendar year 2016’ in sub- 22 paragraph (A)(ii) thereof. 23 If any amount as adjusted under the preceding 24 sentence is not a multiple of $100, such amount 25 VerDate Sep 11 2014 03:04 Jun 05, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2879.IH H2879 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 2879 IH shall be rounded to the next lowest multiple of 1 $100.’’. 2 (c) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to amounts paid or incurred in tax- 4 able years beginning after December 31, 2019. 5 SEC. 3. ALLOWANCE OF CREDIT FOR SMALL EMPLOYER DE- 6 PENDENT CARE ASSISTANCE PROGRAM 7 START-UP COSTS. 8 (a) IN GENERAL.—Section 45E of the Internal Rev- 9 enue Code of 1986 is amended— 10 (1) by striking ‘‘pension plan’’ in subsection (a) 11 and inserting ‘‘employee benefit’’, and 12 (2) by adding at the end the following new sub- 13 section: 14 ‘‘(f) APPLICATION TO DEPENDENT CARE ASSIST- 15 ANCE PROGRAMS.— 16 ‘‘(1) IN GENERAL.—A dependent care assist- 17 ance program of an eligible employer which meets 18 the requirements of section 129(d) shall be treated 19 as an eligible employer plan for purposes of this sec- 20 tion. 21 ‘‘(2) SEPARATE APPLICATION.—This section 22 (including the limitation under subsection (b)) shall 23 be applied separately with respect to any such de- 24 pendent care assistance program of the eligible em- 25 VerDate Sep 11 2014 03:04 Jun 05, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2879.IH H2879 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 2879 IH ployer and other eligible employer plans of such eli- 1 gible employer.’’. 2 (b) CONFORMING AMENDMENTS.— 3 (1) Section 38(b)(14) of the Internal Revenue 4 Code of 1986 is amended by striking ‘‘pension plan’’ 5 and inserting ‘‘employee benefit’’. 6 (2) The heading for section 45E of such Code 7 is amended by striking ‘‘PENSION PLAN’’ and in- 8 serting ‘‘EMPLOYEE BENEFIT’’. 9 (3) The table of sections for subpart D of part 10 IV of subchapter A of chapter 1 of such Code is 11 amended by striking ‘‘pension plan’’ in the item re- 12 lating to section 45E and inserting ‘‘employee ben- 13 efit’’. 14 (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to costs paid or incurred in taxable 16 years beginning after December 31, 2019, with respect to 17 dependent care assistance programs first effective after 18 such date. 19 SEC. 4. CREDIT FOR MATCHING DEPENDENT CARE ASSIST- 20 ANCE PROGRAM CONTRIBUTIONS BY EM- 21 PLOYERS. 22 (a) IN GENERAL.—Subpart D of part IV of sub- 23 chapter A of chapter 1 of the Internal Revenue Code of 24 VerDate Sep 11 2014 03:04 Jun 05, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2879.IH H2879 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 2879 IH 1986 is amended by inserting after section 45S the fol- 1 lowing new section: 2 ‘‘SEC. 45T. CREDIT FOR EMPLOYER DEPENDENT CARE AS- 3 SISTANCE PROGRAM MATCHING CONTRIBU- 4 TIONS. 5 ‘‘(a) IN GENERAL.—For purposes of section 38, the 6 employer dependent care assistance matching contribution 7 credit determined under this section for any taxable year 8 is an amount equal to the lesser of— 9 ‘‘(1) the amount of contributions made by the 10 employer with respect to employees to a dependent 11 care assistance program that meets the requirements 12 of section 129(d), or 13 ‘‘(2) the amount of contributions to such de- 14 pendent care assistance program elected by such em- 15 ployees under a cafeteria plan of the employer to 16 which section 125 applies. 17 ‘‘(b) LIMITATION.—The credit allowed under sub- 18 section (a) for any taxable year with respect to any em- 19 ployee shall not exceed $1,000. 20 ‘‘(c) DEFINITIONS.—Any term used in this section 21 which is used in section 129 shall have the meaning given 22 such term under section 129.’’. 23 (b) CONFORMING AMENDMENTS.— 24 VerDate Sep 11 2014 03:04 Jun 05, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2879.IH H2879 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 2879 IH (1) Section 38(b) of the Internal Revenue Code 1 of 1986 is amended by striking ‘‘plus’’ at the end of 2 paragraph (31), by striking the period at the end of 3 paragraph (32) and inserting ‘‘, plus’’, and by add- 4 ing at the end the following new paragraph: 5 ‘‘(33) the employer dependent care assistance 6 matching contribution credit determined under sec- 7 tion 45T(a).’’. 8 (2) The table of sections for subpart D of part 9 IV of subchapter A of chapter 1 of the Internal Rev- 10 enue Code of 1986 is amended by inserting after the 11 item relating to section 45S the following new item: 12 ‘‘Sec. 45T. Credit for employer dependent care assistance program matching contributions.’’. (c) EFFECTIVE DATE.—The amendments made by 13 this section shall apply to taxable years beginning after 14 December 31, 2019. 15 Æ VerDate Sep 11 2014 03:04 Jun 05, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H2879.IH H2879 pamtmann on DSKBFK8HB2PROD with BILLS