Lafayette Reporter

Senator John Kennedy, a member of the Senate Budget Committee, has introduced new legislation aimed at easing the financial burden of dependent care for American families. The proposed bill, known as the Dependent Care Flexible Spending Account Expansion Act, seeks to increase the annual contribution limit for Dependent Care Flexible Spending Accounts (FSA).

Kennedy's initiative comes in response to rising child care costs in Louisiana, which saw an increase of over 11% between 2018 and 2022. "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," stated Kennedy.

Dependent Care FSAs are pre-tax benefit accounts that allow individuals to allocate funds towards expenses related to dependent care. This includes costs associated with preschool, daycare services for children or adults, babysitting, and elder care.

Under existing regulations, the maximum contribution limit for a Dependent Care FSA is $5,000 annually if married and filing jointly or single. For those married but filing separately, the limit is set at $2,500 per year.

The proposed legislation aims to amend the Internal Revenue Code of 1986 by increasing these limits. If passed, it would raise the annual contribution cap to $7,500 per household for joint filers and $3,750 for those married but filing separately.

The full text of Kennedy's bill is available online.