Sen. John Kennedy (R-LA) on December 3 introduced a bill to increase the amount a Flexible Spending Arrangement (FSA) owner can contribute to his/her FSA for dependent care expenses. While it is unlikely this bill will be enacted this year, its introduction tees up the issue for the incoming 119th Congress.
The Dependent Care Flexible Spending Account Expansion Act would increase the dependent care FSA contribution limit from $5,000 to $7,500 for married couples filing jointly. The current limit for single taxpayers is $2,500, which the Kennedy bill would increase to $3,750.
In introducing his bill, Sen. Kennedy noted that between 2018 and 2022 child care costs in his state (Louisiana) rose more than 11 percent. “Louisianans work tirelessly, but many still struggle to afford the rising cost of caring for a child or loved one,” Sen. Kennedy said. “The Dependent Care Flexible Spending Account Expansion Act would help Americans save more money so that they can continue to provide for their families while managing caretaking expenses.”
Prospects: There is little chance that Congress will enact this bill this year, prior to the end of the 118th Congress. However, introduction of the bill this year sets it up for consideration next year, perhaps in the big 2025 tax bill that will begin to take shape early next year.
NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org