[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5837 Introduced in House (IH)]
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116th CONGRESS
2d Session
H. R. 5837
To amend the Internal Revenue Code of 1986 to permit treatment of child
care payments as elective deferrals for purposes of employer matching
contributions, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 10, 2020
Mrs. Wagner (for herself and Mr. Jeffries) introduced the following
bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to permit treatment of child
care payments as elective deferrals for purposes of employer matching
contributions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Investing in Your Family's Future
Act''.
SEC. 2. TREATMENT OF CHILD CARE PAYMENTS AS ELECTIVE DEFERRALS FOR
PURPOSES OF MATCHING CONTRIBUTIONS.
(a) In General.--Subparagraph (A) of section 401(m)(4) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of clause (i), by striking the period at the end of clause (ii) and
inserting ``, and'', and by adding at the end the following new clause:
``(iii) subject to the requirements of
paragraph (13), any employer contribution made
to a defined contribution plan on behalf of an
employee on account of a qualified child care
payment.''.
(b) Qualified Child Care Payment.--Paragraph (4) of section 401(m)
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new subparagraph:
``(D) Qualified child care payment.--The term
`qualified child care payment' means any payment by an
employee of employment-related expenses (within the
meaning of section 21(b)(2)), but only to the extent
such payments in the aggregate for the year do not
exceed an amount equal to
``(i) the limitation applicable under
section 402(g) for the year (or, if lesser, the
employee's compensation (as defined in section
415(c)(3)) for the year), reduced by
``(ii) the elective deferrals made by the
employee for such year.''.
(c) Matching Contributions for Qualified Child Care Payments.--
Subsection (m) of section 401 of the Internal Revenue Code of 1986 is
amended by redesignating paragraph (13) as paragraph (14), and by
inserting after paragraph (12) the following new paragraph:
``(13) Matching contributions for qualified child care
payments.--
``(A) In general.--For purposes of paragraph
(4)(A)(iii), an employer contribution made to a defined
contribution plan on account of a qualified child care
payment shall be treated as a matching contribution for
purposes of this title if--
``(i) the plan provides matching
contributions on account of elective deferrals
at the same rate as contributions on account of
qualified child care payments,
``(ii) the plan provides matching
contributions on account of qualified child
care payments only on behalf of employees
otherwise eligible to make elective deferrals,
and
``(iii) under the plan, all employees
eligible to receive matching contributions on
account of elective deferrals are eligible to
receive matching contributions on account of
qualified child care payments.
``(B) Treatment for purposes of nondiscrimination
rules, etc.--
``(i) Nondiscrimination rules.--For
purposes of subparagraph (A)(iii), subsection
(a)(4), and section 410(b), matching
contributions described in paragraph
(4)(A)(iii) shall not fail to be treated as
available to an employee solely because such
employee does not have employment-related
expenses (within the meaning of section
21(b)(2)).
``(ii) Child care payments not treated as
plan contribution.--Except as provided in
clause (iii), a qualified child care payment
shall not be treated as a contribution to a
plan under this title.
``(iii) Matching contribution rules.--
Solely for purposes of meeting the requirements
of paragraph (11)(B) or (12) of this
subsection, or paragraph (11)(B)(i)(II),
(12)(B), or (13)(D) of subsection (k), a plan
may treat a qualified child care payment as an
elective deferral or an elective contribution,
whichever is applicable.''.
(d) Simple Retirement Accounts.--Paragraph (2) of section 408(p) of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new subparagraph:
``(F) Matching contributions for qualified child
care payments.--
``(i) In general.--Subject to the rules of
clause (iii), an arrangement shall not fail to
be treated as meeting the requirements of
subparagraph (A)(iii) solely because under the
arrangement, solely for purposes of such
subparagraph, qualified child care payments are
treated as amounts elected by the employee
under subparagraph (A)(i)(I) to the extent such
payments do not exceed--
``(I) the applicable dollar amount
under subparagraph (E) (after
application of section 414(v)) for the
year (or, if lesser, the employee's
compensation (as defined in section
415(c)(3)) for the year), reduced by
``(II) any other amounts elected by
the employee under subparagraph
(A)(i)(I) for the year.
``(ii) Qualified child care payment.--For
purposes of this subparagraph, the term
`qualified child care payment' means any
payment by an employee of employment-related
expenses (within the meaning of section
21(b)(2)).
``(iii) Applicable rules.--Clause (i) shall
apply to an arrangement only if, under the
arrangement--
``(I) matching contributions on
account of qualified child care
payments are provided only on behalf of
employees otherwise eligible to elect
contributions under subparagraph
(A)(i)(I), and
``(II) all employees otherwise
eligible to participate in the
arrangement are eligible to receive
matching contributions on account of
qualified child care payments.''.
(e) 403(b) Plans.--Subparagraph (A) of section 403(b)(12) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following: ``The fact that the employer offers matching contributions
on account of qualified child care payments as described in section
401(m)(13) shall not be taken into account in determining whether the
arrangement satisfies the requirements of clause (ii) (and any
regulation thereunder).''.
(f) 457(b) Plans.--Subsection (b) of section 457 of the Internal
Revenue Code of 1986 is amended by adding at the end the following: ``A
plan which is established and maintained by an employer which is
described in subsection (e)(1)(A) shall not be treated as failing to
meet the requirements of this subsection solely because the plan, or
another plan maintained by the employer which meets the requirements of
section 401(a), provides for matching contributions on account of
qualified child care payments as described in section 401(m)(13).''.
(g) Regulatory Authority.--The Secretary shall prescribe
regulations for purposes of implementing the amendments made by this
section, including regulations--
(1) permitting a plan to make matching contributions for
qualified child care payments, as defined in sections
401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of
1986, as added by this section, at a different frequency than
matching contributions are otherwise made under the plan,
provided that the frequency is not less than annually;
(2) permitting employers to establish reasonable procedures
to claim matching contributions for such qualified child care
payments under the plan, including an annual deadline (not
earlier than 3 months after the close of each plan year) by
which a claim must be made; and
(3) promulgating model amendments which plans may adopt to
implement matching contributions on such qualified child care
payments for purposes of sections 401(m), 408(p), 403(b), and
457(b) of the Internal Revenue Code of 1986.
(h) Effective Date.--The amendments made by this section shall
apply to contributions made for years beginning after December 31,
2020.
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