Plain Language Summary
# CHILD Act of 2025 Summary **What the Bill Would Do** The CHILD Act would double the maximum amount of money that workers can set aside in a dependent care flexible spending account (FSA) from $5,000 to $10,000 per year. These accounts allow employees to use pre-tax dollars to pay for childcare expenses, reducing their taxable income. The bill would also adjust this limit annually to account for inflation, meaning the cap would increase each year based on rising costs. **Who It Affects** This bill primarily affects working parents and guardians who use formal childcare services (such as daycare centers or nanny services). It would benefit middle and higher-income families most, as they're more likely to use dependent care FSAs.
Married couples filing separately would see their individual limits increase from $2,500 to $5,000. The bill could make childcare more affordable by allowing families to save more money in pre-tax dollars. **Current Status** The bill was introduced in the 119th Congress and is currently in committee, meaning it has not yet been debated or voted on by the full House of Representatives. No action has been taken beyond the initial introduction.
CRS Official Summary
Combating High Inflation Limiting Daycare Act of 2025 or the CHILD Act of 2025This bill increases the maximum annual amount that may be contributed to a dependent care assistance program (generally known as a dependent care flexible spending account [FSA]).Under the bill, the maximum annual amount that may be contributed to a dependent care FSA increases from $5,000 ($2,500 for married taxpayers who file separate federal tax returns) to $10,000 ($5,000 for married taxpayers who file separate federal tax returns) and is adjusted annually for inflation.
Latest Action
Referred to the House Committee on Ways and Means.