Child and Dependent Care Modernization Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3397 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. 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 re- ferred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code to increase the exclu- sion for employer-provided dependent care assistance and to allow individuals to carry forward dependent care flexible spending arrangement account balances. 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 ‘‘Child and Dependent 4 Care Modernization Act of 2019’’. 5 VerDate Sep 11 2014 22:51 Jun 26, 2019 Jkt 034408 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3397.IH H3397 pbinns on DSK79D2C42PROD with BILLS 2 •HR 3397 IH SEC. 2. INCREASE IN EXCLUSION FOR EMPLOYER-PRO- 1 VIDED DEPENDENT CARE ASSISTANCE. 2 (a) IN GENERAL.—Section 129(a)(2) of the Internal 3 Revenue Code of 1986 is amended— 4 (1) by striking ‘‘shall not exceed’’ in subpara- 5 graph (A) and all that follows and inserting the fol- 6 lowing: ‘‘shall not exceed— 7 ‘‘(i) $8,000 (half such dollar amount 8 in the case of a separate return by a mar- 9 ried individual) if there is 1 qualifying in- 10 dividual with respect to the taxpayer dur- 11 ing such taxable year, or 12 ‘‘(ii) $16,000 (half such dollar amount 13 in the case of such a separate return) if 14 there are 2 or more qualifying individuals 15 with respect to the taxpayer during such 16 taxable year.’’, and 17 (2) by adding at the end the following new sub- 18 paragraph: 19 ‘‘(D) QUALIFYING INDIVIDUAL.—For pur- 20 poses of this paragraph, the term ‘qualifying in- 21 dividual’ has the meaning given to such term 22 under section 21(b)(1).’’. 23 (b) INFLATION ADJUSTMENT.—Section 129(a)(2) of 24 such Code is amended by redesignating subparagraph (C) 25 VerDate Sep 11 2014 22:51 Jun 26, 2019 Jkt 034408 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3397.IH H3397 pbinns on DSK79D2C42PROD with BILLS 3 •HR 3397 IH as subparagraph (D) and by inserting after subparagraph 1 (B) the following new subparagraph: 2 ‘‘(C) INFLATION ADJUSTMENT.—In the 3 case of any taxable year beginning in a calendar 4 year after 2020, the dollar amounts in subpara- 5 graph (A) shall each be increased by an amount 6 equal to— 7 ‘‘(i) such dollar amount, multiplied by 8 ‘‘(ii) the cost-of-living adjustment de- 9 termined under section 1(f)(3) for the cal- 10 endar year in which the taxable year be- 11 gins, determined by substituting ‘calendar 12 year 2019’ for ‘calendar year 2016’ in sub- 13 paragraph (A)(ii) thereof. 14 Any increase determined under the preceding 15 sentence shall be rounded to the nearest mul- 16 tiple of $100.’’. 17 (c) EFFECTIVE DATE.—The amendment made by 18 this section shall apply to taxable years beginning after 19 December 31, 2019. 20 SEC. 3. CARRYFORWARD FOR DEPENDENT CARE FLEXIBLE 21 SPENDING ARRANGEMENT ACCOUNT BAL- 22 ANCE. 23 (a) IN GENERAL.—Section 125 of the Internal Rev- 24 enue Code of 1986 is amended by redesignating sub- 25 VerDate Sep 11 2014 22:51 Jun 26, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3397.IH H3397 pbinns on DSK79D2C42PROD with BILLS 4 •HR 3397 IH sections (k) and (l) as subsections (l) and (m), respec- 1 tively, and by inserting after subsection (j) the following 2 new subsection: 3 ‘‘(k) CARRYFORWARD.—For purposes of this title, a 4 plan or other arrangement shall not fail to be treated as 5 a cafeteria plan or flexible spending arrangement for a 6 plan year merely because such arrangement provides that 7 an amount not exceeding the amount with respect to such 8 individual under section 129(a)(2) in effect for the suc- 9 ceeding plan year may be carried forward to the suc- 10 ceeding plan year.’’. 11 (b) EFFECTIVE DATE.—The amendments made by 12 this section shall apply to taxable years beginning after 13 December 31, 2019. 14 Æ VerDate Sep 11 2014 22:51 Jun 26, 2019 Jkt 034408 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H3397.IH H3397 pbinns on DSK79D2C42PROD with BILLS