Corporate Voices for Working Families, along with the American Business Collaboration (ABC), has been successful in working with members of Congress to introduce legislation that, when passed, will increase the spending limits on Dependent Care Flexible Spending Accounts (DCFSA).
Representatives Carol Shea-Porter (D-NH) and Jim Ramstad (R-MN) introduced Wednesday H.R. 7035 to amend the Internal Revenue Tax Code to raise the annual limit on dependent care expenditures from $5,000 to $7,500. DCFSA spending limits have not been increased in two decades.
For Corporate Voices for Working Families this has been a priority focus of our legislative efforts for more than a year. And working in conjunction with ABC, the members of our Legislative Committee and others, we were successful in helping to draft this legislation and gaining bipartisan support in both the House and Senate.
Here’s the text of the news release we distributed yesterday following the introduction of the legislation.
Corporate Voices for Working Families Supports Legislation to Increase Dependent Care Flexible Spending Account Limits
Washington, D.C., September 24 – Corporate Voices for Working Families (CVWF) and American Business Collaboration (ABC) applauds Representatives Carol Shea-Porter (D-NH) and Jim Ramstad (R-MN) who introduced today H.R. 7035 to amend the Internal Revenue Code to increase dependent care flexible spending account (DCFSA) limits.
The legislation proposes an increase in the cap on DCFSA from the current maximum of $5,000 a year—a figure that has been unchanged since 1986—to $7,500 a year. In today’s dollars, this tax benefit is worth only $2,800, while the average cost of care for an infant ranges from $4,000 to $14,000 a year.
“DCFSA is a powerful tool that benefits working families, but inflation has reduced its effectiveness,” Donna Klein, president and founder of Corporate Voices for Working Families, said. “Congress should raise contribution limits to ensure quality care for children, dependent elderly and the disabled.”