Increased maximum contribution to dependent care assistance programs

(a) In general Section 129(a)(2)(A) is amended by striking $5,000 ($2,500 and inserting $10,000 ($5,000. (b) Cost-of-Living adjustment Section 129 is amended by adding at the end the following new subsection: (f) Inflation adjustment (1) In general Each dollar amount in this section shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins, determined by substituting calendar year 2024 for calendar year 2016 in subparagraph (A)(ii) thereof. (2) Rounding If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.. (c) Removing deadwood Section 129(a)(2) is amended by striking subparagraph (D). (d) Effective date The amendments made by this section shall apply to calendar years beginning after December 31, 2025.