Improving Child Care for Working Families Act improves Arizona families’ Dependent Care FSAs
WASHINGTON – Arizona senior Senator Kyrsten Sinema cosponsored the bipartisan Improving Child Care for Working Families Act with Republican Senator Joni Ernst (Iowa) and Democratic Senator Maggie Hassan (N.H.) The Senators’ legislation makes child care more affordable for Arizonan families by expanding the amount Arizona families can deposit into tax-advantaged Dependent Care Flexible Spending Accounts (FSAs).
“Hardworking Arizona families deserve access to affordable child care. Our bipartisan solution permanently improves how Arizonans’ can save for child care to help working parents afford the costs of childcare and get ahead,” said Sinema.
Currently, the American Rescue Plan Act increased the amount of money that Arizona families can deposit tax-free into a Dependent Care FSA to $10,500, however, this provision will expire at the end of 2021. Sinema’s bipartisan bill permanently increases that maximum deposit to Dependent Care FSAs from $5,000 to $10,500, helping ensure Arizona families can save more to better manage unexpected child care expenses.
Last year, Sinema secured policies from the Dependent Care Expense Relief Act and the Fair FSAs Act in the end-of-the-year coronavirus relief law. These Sinema-backed bipartisan bills, which are now law, allow Arizona families to roll-over remaining funds from Flexible Spending Accounts (FSAs) and Dependent Care FSAs. The law also allows eligible families to use their 2019 reported earned income to calculate their 2020 Earned Income Tax Credit (EITC) and the refundable portion of the Child Tax Credit in order to maximize their benefits.