Details of Public Law 119-21, section 70404 , One Big Beautiful Bill Act

This provision modifies the employer-provided dependent care assistance program by increasing the amount eligible for the gross income exclusion from $5,000 ($2,500 in case of a separate return by a married individual) to $7,500 ($3,750 in the case of a separate return by a married individual).

California conforms to the employer-provided dependent care assistance exclusion from gross income as of the specified date of January 1, 2025, without any modifications. As a result, California does not conform to the federal provision that increases the employer-provided dependent care assistance exclusion amount because this change was made after the specified date of January 1, 2025.