H.R. 5558: Improving Child Care for Working Families Act of 2025

This bill, titled the Improving Child Care for Working Families Act of 2025, aims to amend the Internal Revenue Code of 1986 to increase the amount of money that can be excluded from taxable income under dependent care assistance programs. Specifically, it proposes to raise the limit on the exclusion for dependent care benefits from $7,500 to $10,500 for families with qualifying dependents. This increase would allow families to benefit financially by reducing their taxable income when they use dependent care assistance, making child care costs more manageable for working families.

Key Provisions

• Increase in Exclusion Limit:

  The bill modifies Section 129 of the Internal Revenue Code, allowing an increased pre-tax benefit for child care expenses. The new limit of $10,500 aims to provide additional support to working families who need assistance with child care costs.

• Effective Date:

  This increase will apply to expenses incurred in calendar years starting after the enactment of the bill.

Potential Impact

The increase in the exclusion limit is designed to ease the financial burden of child care for families, potentially encouraging more parents to enter or remain in the workforce. This could contribute to economic growth by increasing overall employment rates among parents with dependents.

Relevant Companies

None found