Bill Text: HI HR147 | 2020 | Regular Session | Introduced


Bill Title: Urging The United States Internal Revenue Service To Raise The Dependent Care Flexible Savings Account Limits To Reflect The Average Cost Of Child Care In Each State.

Spectrum: Slight Partisan Bill (Democrat 9-4)

Status: (Introduced - Dead) 2020-03-11 - Referred to HSH, FIN, referral sheet 40 [HR147 Detail]

Download: Hawaii-2020-HR147-Introduced.html

HOUSE OF REPRESENTATIVES

H.R. NO.

147

THIRTIETH LEGISLATURE, 2020

 

STATE OF HAWAII

 

 

 

 

 


HOUSE RESOLUTION

 

 

urging the united stateS internal revenue service to raise the dependent care flexible savings account limits to reflect the average cost of child care in each state.

 

 

 


     WHEREAS, child care is one of the biggest expenses families face; and

 

     WHEREAS, the national average cost of child care is between $9,000 and $9,600 per year; and

 

     WHEREAS, Hawaii is ranked twelfth out of fifty states and the District of Columbia for most expensive infant care with an average annual cost of $13,731 and child care for a 4-year-old costs $8,937 annually; and

 

     WHEREAS, infant care in Hawaii costs $4,022 (41.4%) more per year than in-state tuition for a four-year public college making Hawaii one of thirty-three states where infant care is more expensive than college; and

 

     WHEREAS, in Hawaii, infant care costs just 25.9% less than average rent and infant care for one child takes up to 16.0% of an average family’s income in Hawaii; and

 

     WHEREAS, according to the U.S. Department of Health and Human Services, child care is affordable if it costs no more than 7% of a family’s income. By this standard, only 10.9% of Hawaii families can afford infant care; and

 

     WHEREAS, with a Flexible Spending Account one can save an average of 30 percent by using pre-tax dollars to pay for eligible FSA expenses; and

 

     WHEREAS, there are several types of Flexible Spending Accounts, including the Dependent Care Flexible Spending Account that is a pre-tax benefit account used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare; and

 

     WHEREAS, with a Dependent Care Flexible Spending Account  one can use pre-tax dollars to pay for qualified out-of-pocket dependent day care expenses. The money contributed to a Dependent Care Flexible Spending Account is not subject to payroll taxes which results in more take-home pay; and

 

     WHEREAS, one can use Dependent Care Flexible Spending Account funds to pay eligible dependent care expenses for care of dependent children under the age of thirteen, or for a person of any age whom one claims as a dependent on federal income tax returns and who is mentally or physically incapable of caring for himself or herself; and

 

     WHEREAS, examples of eligible services include the placement or program fees for a dependent care provider, such as an au pair, before and after-school care (other than tuition expenses), care of an incapacitated adult who lives with you at least eight hours a day, childcare at a day camp, nursery school, or by a private sitter, late pick-up fees, expenses for a housekeeper whose duties include caring for an eligible dependent, summer or holiday day camps, including registration fees, activities in lieu of daycare when the fees associated with the activity are incidental to, or cannot be separated from, the cost of care (swimming lessons, arts and crafts, music lessons, etc.); and

 

     WHEREAS, under Internal Revenue Service rules, the maximum amount that can be elected for a Dependent Care Flexible Spending Account is limited to the lesser of $5,000 for single individuals or married couples filing joint returns and $2,500 for married couples filing separate returns; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Thirtieth Legislature of the State of Hawaii, Regular Session of 2020, that the commissioner of the United States Internal Revenue Service is urged to raise the limit on Dependent Care Flexible Savings Accounts to $10,000 per child to reflect the average cost of child care in the United States; and

 

     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Commissioner of the United States Internal Revenue Service, The President of the United States Senate, the Speaker of the United States House, the Hawaii members of the United States Congress, the Governor of Hawai'i, the President of the Economic Policy Institute, the Director of Parents and Children together of Hawai'i, and the Director of the Tax Foundation of Hawai'i.

 

 

 

 

OFFERED BY:

_____________________________

 

 

Report Title: 

Increase Limit on Dependent Care Flexible Spending Accounts.

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