1. Short title
This Act may be cited as the “Families First Act”.
Families First Act
A BILL
To amend the Internal Revenue Code of 1986 to index the dependent care credit and income exclusion for inflation.
2. Inflation adjustments of credit and exclusion for dependent care expenses
Credit—
In general— Section 21(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(11) Inflation adjustment
“(A) In general—In the case of any taxable year beginning in a calendar year after 2014, the dollar amounts in subsections (a)(2) and (c)(2) 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 2013” for “calendar year 1992” in subparagraph (B) thereof.
“(B) Rounding—Any increase determined under subparagraph (A) shall be rounded to the nearest multiple of $10.”
Dollar limit on amount creditable— Section 21(c)(1) of the Internal Revenue Code of 1986 is amended by striking “$3,000” and inserting “50 percent of the amount in effect under paragraph (2) for the taxable year”.
Exclusion—
In general— Section 129(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(10) Inflation adjustment
“(A) In general—In the case of any taxable year beginning in a calendar year after 2014, the dollar amount in subsection (a)(2)(A) shall 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 2013” for “calendar year 1992” in subparagraph (B) thereof.
“(B) Rounding—Any increase determined under subparagraph (A) shall be rounded to the nearest multiple of $10.”
Limitation on exclusion— Section 129(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking “$2,500” and inserting “50 percent of such amount”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.