Feenstra Leads Legislation to Make Childcare More Affordable for Iowa Families

Last week, U.S. Rep. Randy Feenstra (R-Hull) helped introduce legislation – the Combatting High Inflation Limiting Daycare (CHILD) Act – to help Iowa families cover the skyrocketing cost of childcare by doubling the annual contribution limit for tax-advantaged Dependent Care Flexible Savings Accounts (DCFSAs). The contribution limit would also be adjusted for inflation.

“When I’m traveling on my 36 County Tour, parents, daycare centers, and childcare providers all tell me that the cost of childcare is out of control and that we need real solutions to make life more affordable for our families. I completely agree,” said Rep. Feenstra. “That’s why I helped introduce the CHILD Act to double the amount of money that families are allowed to save tax-free to pay for childcare. This approach lets parents – not federal bureaucrats – decide how best to spend their hard-earned money when it comes to caring for their children while pursuing a career. While inflation refuses to quit, I’m encouraged that this legislation will help families save more money to put their children in daycare or after-school programs and keep more money in their pockets.”

Key provisions of the CHILD Act include:

• Increased contribution limit: Under this legislation, the annual contribution limit for Dependent Care FSAs would be raised from $5,000 to $10,000 for joint tax filers and from $2,500 to $5,000 for independent filers.
• Annual adjustment for inflation: Unlike Health FSAs, the maximum contribution for Dependent Care FSAs has remained stagnant since 1986, with a maximum contribution limit of $5,000 per household. The CHILD Act ensures that annual adjustments for inflation are implemented so that contribution limits reflect rises in prices.

Full legislative text can be found HERE.