House Passes Bill Allowing More Child Care Savings
The House passed a bill on Tuesday that would allow families to keep unspent money they saved that year in tax-free child care accounts.
Currently, employees have to give up any money that remains unspent in their flexible spending accounts at the end of the year. Under the bill, passed by voice vote, families will be able to roll over up to $500 in unused child care savings to the next year, the Associated Press reported.
Flexible spending accounts are offered by employers so families can set aside pre-tax money for health care or child care expenses.
"These accounts are not being utilized to their full extent," said U.S. Rep. Eric Cantor, R-Va. He said the "use it or lose it" rule hurts families who could use the roll-over benefit to ensure their child care bills can be paid.
U.S. Rep. Benjamin Cardin, D-Md., said Congress should do more to help people care for children and dependent adults. The bill corrects a flaw in the existing system, however. "You have to determine in a year how much money you are going to spend," he said. "If you put in too much money, you are going to lose that money."
The money in flexible spending accounts can be used to pay for care for disabled spouses, parents or dependent adults.
Earlier this year, the House passed a similar bill allowing employees to roll over to the next year up to $500 in unused money set aside in flexible spending accounts for health care.