119th (2025–2027)
H.R. 5558
The Improving Child Care for Working Families Act of 2025 increases the tax break available to workers who use employer-sponsored dependent care assistance programs. Currently, employees can exclude up to $7,500 per year in child care expenses from their taxable income (or $3,750 if married filing separately); this bill raises those limits to $10,500 and $5,250 respectively. The change primarily benefits working parents and caregivers who use formal child care services, allowing them to save more money through pre-tax payroll deductions. The increased limits would take effect for the tax year following the bill's enactment. This is a tax code amendment with no direct federal spending, though it reduces tax revenue by allowing workers to exclude more dependent care costs from their income.