CHILD Act of 2025

This bill, known as the CHILD Act of 2025, proposes significant changes to the Internal Revenue Code regarding dependent care assistance programs. Its primary goal is to help families manage childcare costs by increasing the maximum tax-advantaged contributions and ensuring these benefits keep pace with economic changes. Key provisions include doubling the maximum contribution limit for dependent care assistance programs from $5,000 to $10,000, with a corresponding increase for those married filing separately. Furthermore, the bill introduces an inflation adjustment mechanism , mandating that all dollar amounts within Section 129 of the Code be annually increased based on a cost-of-living adjustment, using 2023 as the base year. These amendments are slated to take effect for calendar years beginning after December 31, 2024, providing relief to families facing rising daycare expenses.