1. Short title
This Act may be cited as the “Child Care Flex Spending Act of 2019”.
Child Care Flex Spending Act of 2019
A BILL
To amend the Internal Revenue Code of 1986 to increase the dollar limitation on the exclusion for employer-provided dependent care assistance.
2. Increase in dollar limitation on exclusion for employer-provided dependent care assistance
In general— Subparagraph (A) of section 129(a)(2) of the Internal Revenue Code of 1986 is amended by striking “shall not exceed” and all that follows and inserting the following:
“(i) $5,000, or
“(ii) $10,000, reduced (but not below zero) by 5 cents for each dollar (or fraction thereof) by which the employee's earned income for the taxable year exceeds $50,000.”
Inflation adjustment— Paragraph (2) of section 129(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
“(D) Inflation adjustment—In the case of any taxable year beginning in a calendar year after 2020, the $5,000 and $10,000 amounts contained in subparagraph (A) 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 2019” for “calendar year 2016” in subparagraph (A)(ii) thereof.”
Employer safe harbor for reporting— The Secretary of the Treasury (or the Secretary's delegate) shall promulgate regulations or other guidance to assist an employer in determining, for purposes of section 3401(a)(18) of the Internal Revenue Code of 1986, the amount (if any) in excess of $5,000 which it is reasonable to believe an employee will be able to exclude under section 129 of such Code.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2019.