,i #aaeth ,,congress #b;d ,session ,h4 ,r4 #gjeg ,,in ,,the ,,house ,,of ,,representatives ,october #i1 #bjah,mrs4 ,wagner 7for herself and ,mr4 ,sessions7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code to increase the exclusion for employer-provided dependent care assistance and to allow limited annual carryforward of unused dependent care flexible spending arrangement account balances4 #a4 ,short title ,this ,act may be cited as the ,child and ,dependent ,care ,modernization ,act of #bjah4 #b4 ,increase in exclusion for employer-provided dependent care assistance 7a7 ,in general ,section #abi7;a77#b7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking shall not exceed in subparagraph 7,a7 and all that follows and inserting the following3 shall not exceed-- 7i7 #h1jjj 7half such dollar amount in the case of a separate return by a married individual7 if there is #a qualifying individual with respect to the taxpayer during such taxable year1 or 7ii7 #af1jjj 7half such dollar amount in the case of such a separate return7 if there are #b or more qualifying individuals with respect to the taxpayer during such taxable year4 2 and 7#b7 by adding at the end the following new subparagraph3 7,d7 ,qualifying individual ,for purposes of this paragraph1 the term qualifying individual has the meaning given to such term under section #ba7;b77#a74 4 7b7 ,inflation adjustment ,section #abi7;a77#b7 of such ,code is amended by redesignating subparagraph 7,c7 as subparagraph 7,d7 and by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 ,inflation adjustment ,in the case of any taxable year beginning in a calendar year after #bjai1 the dollar amounts in clauses 7i7 and 7ii7 of subparagraph 7,a7 shall be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjah for calendar year #aiib in subparagraph 7,a77ii7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the nearest multiple of #ajj4 4 7c7 ,conforming amendment ,section #abi7;a77#b74 7d7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4 #c4 ,carryforward and limitation for dependent care flexible spending arrangement account balance 7a7 ,in general ,section #abe of the ,internal ,revenue ,code of #aihf is amended by redesignating subsections 7k7 and 7l7 as subsections 7l7 and 7m71 respectively and by inserting after subsection 7j7 the following new subsection3 7k7 ,rules for dependent care flexible spending arrangements 7#a7 ,carryforward of unused dependent care benefits ,for purposes of this title1 a plan or other arrangement shall not fail to be treated as a cafeteria plan or dependent care flexible spending arrangement merely because such arrangement provides that an amount not exceeding the lesser of-- 7,a7 such arrangement's account balance determined as of the end of any plan year1 or 7,b7 the limitation described in paragraph 7#b7 for the succeeding plan year1 may be carried forward to the succeeding plan year of such flexible spending arrangement4 7#b7 ,cumulative limitation ,for purposes of this section1 if a benefit is provided under a cafeteria plan through a dependent care flexible spending arrangement1 such benefit shall not be treated as a qualified benefit unless it provides that the account balance of the employee shall not exceed the dollar limitation in effect with respect to the employee under section #abi7;a77#b77;,a7 for such plan year4 4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4