Working Families Childcare Access Act of 2023 or the WFCA Act of 2023 This bill includes certain additional expenses in a dependent care flexible spending arrangement (FSA), specifically qualified sports, tutoring, and music or art expenses. It also increases the eligibility age for dependent care benefits to 15, allows a carry forward of unused benefits to the next plan year, and increases to $15,000 the maximum amount of dependent care benefits excludible from employee gross income.
If passed, this legislation will have a considerable impact on how parents and guardians manage childcare-related expenses. The increase in the maximum tax-excludable amount for dependent care benefits to $15,000 could offer significant financial relief for families. Furthermore, allowing carry forward of unused contributions from one plan year to the next ensures that parents can optimize their benefits without losing unspent money at the end of the plan year. This flexibility is expected to resonate positively with many families facing rising childcare costs.
House Bill 478, also known as the Working Families Childcare Access Act of 2023, aims to expand the allowable expenses that can be covered under dependent care flexible spending arrangements (FSAs). This bill introduces provisions to include qualified expenses for sports, tutoring, and art or music programs, thereby broadening the types of educational and recreational activities eligible for tax benefits. Additionally, the bill raises the eligibility age for dependents from 13 to 15 years, allowing families with older children to benefit from these provisions.
While the bill presents a supportive framework for working families, it may face some debate regarding the overall financial implications for the federal budget and tax revenue. Critics may worry that expanding the scope of covered expenses and increasing the limits for excludable amounts could lead to a reduction in federal revenues. Additionally, there might be discussions on ensuring that these enhanced benefits are adequately targeted to those who need them most, rather than benefitting higher-income families disproportionately.