House bill lets families rollover tax-free child care savings

WASHINGTON (AP) _ Families who set aside money for child care in tax-free accounts wouldn't have to worry about forfeiting unspent dollars at the end of the year under a bill passed by the House on

Tuesday, June 22nd 2004, 1:17 pm

By: News On 6

WASHINGTON (AP) _ Families who set aside money for child care in tax-free accounts wouldn't have to worry about forfeiting unspent dollars at the end of the year under a bill passed by the House on Tuesday.

House lawmakers passed a bill by voice vote allowing families to roll over to the next year up to $500 in unused child care savings held in a flexible spending account.

Flexible spending accounts let employees set aside a portion of their salaries, before paying taxes, to pay for child care and health care expenses. Current laws require those employees to forfeit unused money that's left in the accounts at the end of the year.

Rep. Eric Cantor, R-Va., said this ``use it or lose it'' rule harms families who could use the cushion to make sure all of their child care expenses are covered.

``These accounts are not being utilized to their full extent,'' he said.

Rep. Benjamin Cardin, D-Md., expressed disappointment that Congress hasn't done more to help people take care of children and dependent adults, but he said the bill makes an important change.

``You have to determine in a year how much money you are going to spend,'' he said. ``If you put in too much money, you are going to lose that money.''

Money in the accounts can be used to pay for care for children under age 13 and disabled spouses, parents or other dependent adults.

The House passed a bill earlier this year allowing employees to roll over up to $500 in unused money set aside in flexible spending accounts for health care in next year's account or health savings accounts.