Bill > HR413

This bill aims to provide financial relief for working parents by increasing the tax-advantaged contribution limits for dependent care assistance programs and adjusting those limits annually for inflation. Specifically, the bill raises the maximum contribution limit from $5,000 to $10,000 per year for individuals (and from $2,500 to $5,000 for married individuals filing separately) for expenses related to child care. The bill introduces an annual inflation adjustment mechanism that will automatically increase these dollar amounts each year based on the cost-of-living adjustment defined in the Internal Revenue Code. Any increases that are not multiples of $50 will be rounded to the nearest $50 increment. The changes will take effect for calendar years beginning after December 31, 2024, meaning the new limits and inflation adjustment will first apply to the 2025 tax year. By indexing dependent care assistance program contributions to inflation, the bill seeks to help parents keep pace with rising child care costs and provide more financial flexibility for working families.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/413/all-info