HR 5558119th CongressIn Committee

Improving Child Care for Working Families Act of 2025

Introduced: Sep 23, 2025

Sponsor: Rep. Schrier, Kim [D-WA-8] (D-Washington)

Economy & TaxesLabor & Employment

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill proposes to amend the Internal Revenue Code of 1986 to increase the tax exclusion limit for dependent care assistance programs. Currently, employees can exclude up to $5,000 ($2,500 for married individuals filing separately) from their taxable income when their employer provides dependent care assistance benefits. This legislation would raise these limits, making it more financially advantageous for working families to utilize employer-sponsored dependent care programs such as Dependent Care Flexible Spending Accounts (FSAs). By increasing the exclusion amount, the bill aims to reduce the tax burden on families who incur childcare or dependent care expenses while working.

Key Points

1Increases the maximum tax exclusion amount for employer-provided dependent care assistance benefits beyond the current $5,000 limit
2Applies to dependent care assistance programs under Section 129 of the Internal Revenue Code
3Would allow employees to set aside more pre-tax dollars for qualifying dependent care expenses
4Maintains the separate filing status consideration for married individuals filing separately (currently $2,500)
5Designed to provide tax relief specifically targeted at working families with dependent care needs

Impact Areas

Working families with children - Parents who pay for childcare while working would benefit from increased tax savingsFamilies caring for elderly or disabled dependents - Those with dependent care expenses for adult family members would see expanded benefitsEmployers - Companies offering dependent care assistance programs may see increased employee participation and satisfactionFederal tax revenue - The Treasury would experience reduced tax collections due to the expanded exclusionChildcare and dependent care service providers - Potentially increased demand as more families can afford services with pre-tax dollars

Generated by claude-sonnet-4-5-20250929 on Oct 2, 2025