What does Preamble of HR 2900 do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed amendment aims to increase and make fully refundable the Child and Dependent Care Tax Credit. It also seeks to increase the maximum amount excludable from gross income for employer-provided dependent care assistance.

What does SHORT TITLE. of HR 2900 do?

This bill is formally titled the Promoting Affordable Childcare for Everyone Act.

What does REFUNDABILITY OF CHILD AND DEPENDENT CARE TAX CREDIT. of HR 2900 do?

This section amends the Internal Revenue Code of 1986 to modify references related to the Child and Dependent Care Tax Credit. Section 21 of the Code is redesignated as section 36C and moved to a new location within the Code. Various sections of the Code are amended to replace references to 'section 21' with 'section 36C'. Amendments are made to tables of sections within the Internal Revenue Code to reflect the redesignation of section 21 to section 36C. The amendments apply to taxable years beginning after December 31, 2025.

What does ENHANCEMENT OF THE CHILD AND DEPENDENT CARE TAX CREDIT. of HR 2900 do?

This section modifies Section 36C of the Internal Revenue Code of 1986. It changes the percentage reductions for the Child and Dependent Care Tax Credit, increasing the 35 percent reduced amount to 50 percent reduced (but not below 35 percent). It restructures subsections (f) and (g) of Section 36C. A new subsection (f) is added to address inflation adjustments. Beginning after 2025, dollar amounts in subsections (a)(2) and (c) will be adjusted for inflation using the cost-of-living adjustment. Inflation adjustments will be rounded to the nearest multiple of $50. These amendments apply to taxable years beginning after December 31, 2025.

What does INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED DEPENDENT CARE of HR 2900 do?

This section modifies the Internal Revenue Code of 1986 regarding dependent care assistance programs. It increases the exclusion limit for employer-provided dependent care assistance from $5,000 to $7,500. Beginning in taxable years after 2026, the $7,500 amount will be adjusted annually for inflation using the cost-of-living adjustment. The inflation adjustment calculation uses calendar year 2025 as the base year, substituting it for calendar year 2016. The adjustments will be rounded to the nearest multiple of $100. These amendments apply to taxable years beginning after December 31, 2025.

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PACE Act — HR. 2900

Last updated: 4/10/2025 · Introduced: 4/10/2025

Author: Claudia Tenney (R-NY)

TL;DR (AI)

The bill increases the Child and Dependent Care Tax Credit, making it fully refundable and adjusting credit percentages and amounts for inflation starting after 2025.
It raises the maximum amount employers can provide for dependent care assistance, excluding it from employee income, from $5,000 to $7,500, with annual inflation adjustments beginning after 2026.
The bill redesignates and relocates a section of the Internal Revenue Code related to the Child and Dependent Care Tax Credit to ensure consistent references.

119th Congressin committeeOfficial page

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Includes provisions on preamble, short title., and 3 more.

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