New legislation would permanently increase the tax-free dollars employees and their employers can set aside for use toward child and dependent care expenses to $10,500.
Congress increased the contribution amount to $10,500 in the American Rescue Plan, but only for the 2021 tax year. The Improving Child Care for Working Families Act would make it permanent.
Bipartisan, bicameral bill: Senators Joni Ernst (R-IA), Maggie Hassan (D-NH), Kyrsten Sinema (D-AZ), and Thom Tillis (R-NC), along with Representatives Cynthia Axne (D-IA) and Brian Fitzpatrick (R-PA) introduced the bill.
Outlook: The measure could be included in the next budget reconciliation (infrastructure) bill, which only requires 51 votes in the Senate to pass.