To amend the Internal Revenue Code of 1986 to clarify the treatment of dependent care assistance programs sponsored by the Department of Defense for members of the Armed Forces of the United States.

January 29, 2003

Ms. LANDRIEU introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to clarify the treatment of dependent care assistance programs sponsored by the Department of Defense for members of the Armed Forces of the United States.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION. 1. CLARIFICATION OF THE TREATMENT OF CERTAIN DEPENDENT CARE ASSISTANCE PROGRAMS.

(a) IN GENERAL- Section 134(b) of the Internal Revenue Code of 1986 (defining qualified military benefit) is amended by adding at the end the following new paragraph:

`(4) CLARIFICATION OF CERTAIN BENEFITS- For purposes of paragraph (1), such term includes any dependent care assistance program (as in effect on the date of the enactment of this paragraph) for any individual described in paragraph (1)(A).'.

(b) CONFORMING AMENDMENTS-

(1) Section 134(b)(3)(A) of the Internal Revenue Code of 1986 is amended by inserting `and paragraph (4)' after `subparagraphs (B)'.

(2) Section 3121(a)(18) of such Code is amended by striking `or 129' and inserting `, 129, or 134(b)(4)'.

(3) Section 3306(b)(13) of such Code is amended by striking `or 129' and inserting `, 129, or 134(b)(4)'.

(4) Section 3401(a)(18) of such Code is amended by striking `or 129' and inserting `, 129, or 134(b)(4)'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2001.

END