Improving Child Care for Working Families Act of 2025

The Improving Child Care for Working Families Act of 2025 increases the tax exclusion limit for dependent care assistance from $7,500 to $10,500 annually for most taxpayers. This change directly benefits working families who receive employer-provided child care benefits by allowing them to exclude more of that assistance from their taxable income. Married couples filing separately would see their exclusion limit rise from $3,750 to $5,250. The amendment applies to amounts paid or incurred in calendar years starting after the bill's enactment.