Submitted by United States Senator John Kennedy of Louisiana
WASHINGTON (December 3, 2024) – Senator John Kennedy (R-La.), a member of the Senate Budget Committee, today introduced the Dependent Care Flexible Spending Account Expansion Act to increase the annual contribution limit for Dependent Care Flexible Spending Accounts (FSA) so that Americans can afford child or dependent care while they work.
Between 2018 and 2022, childcare costs in Louisiana rose more than 11%.
“Louisianians work tirelessly, but many still struggle to afford the rising cost of caring for a child or loved one. 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,” said Kennedy.
A Dependent Care FSA is a pre-tax benefit account that allows Americans to save for dependent care expenses such as preschool, daycare for children or adults, babysitting or elder care.
Under current law, the maximum contribution limit for a Dependent Care FSA is $5,000 per year if the filer is married and filing a joint tax return or if the filer is single. The annual limit is $2,500 if the filer is married and filing a separate tax return.
Kennedy’s legislation would amend the Internal Revenue Code of 1986 to increase the amount of Americans’ income that can be tax-exempt by expanding the Dependent Care FSA annual contribution limit to $7,500 per household, per year for a married person making a joint filing or to $3,750 for a person who is married but filing separately.
The full bill text is available here.
