Section 1 Short title
This Act may be cited as the “Combating High Inflation Limiting Daycare Act of 2025” or the “CHILD Act of 2025”.
Combating High Inflation Limiting Daycare Act of 2025
A BILL
To amend the Internal Revenue Code of 1986 to index dependent care assistance programs to inflation.
Sec. 2 Increased maximum contribution to dependent care assistance programs
In general— Section 129(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking “$5,000 ($2,500” and inserting “$10,000 ($5,000”.
Cost-of-Living adjustment— Section 129 of such Code is amended by adding at the end the following new subsection:
“(f) Inflation adjustment
“(1) In general—Each dollar amount in this section shall be increased by an amount equal to—
“(A) such dollar amount, multiplied by
“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins, determined by substituting “calendar year 2023” for “calendar year 2016” in subparagraph (A)(ii) thereof.
“(2) Rounding—If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.”
Removing deadwood— Section 129(a)(2) of such Code is amended by striking subparagraph (D).
Effective date— The amendments made by this section shall apply to calendar years beginning after December 31, 2024.