U.S. Rep. John Katko (R-NY) announced bipartisan legislation on Wednesday that would establish a tax-free savings account to help parents financially prepare for their families.
The Working Parents Flexibility Act, H.R. 4699, would establish parental savings accounts in which men, women and employers could make tax-free deposits with the ultimate goal of helping parents strike a balance between work and family.
“In order to support central New York families and our local workforce, we must act to address the hardships facing new families and do more to ensure that hardworking moms and dads can afford to stay home with their newborn children,” Katko said. “But we must do so without implementing another tax or burdening small businesses with another mandate. That’s why I’ve taken action to introduce bipartisan legislation that will allow families an individualized, flexible, affordable and optional method to start saving for parenthood.”
Katko announced the Working Families Act at an event held at Pioneer Warehousing and Distribution in Liverpool, New York.
The bill, which Katko cosponsored with U.S. Rep. Kyrsten Sinema (D-AZ), would enable account holders to invest however much they’d like. There would be no time or age constraints on accounts to accommodate families with multiple children.
“This fiscally responsible proposal provides hardworking families in central New York with an affordable, personalized way to provide for basic needs of a family during the first year of parenthood, and I’m grateful to have the support of so many in our community,” Katko said.
Under the bill, unused funds could be rolled into qualifying retirement, college savings or ABLE accounts for people with disabilities without tax penalties.
“Many parents are not adequately prepared to survive on a reduced income while meeting the additional costs of a new baby,” Lisa Conway, the vice president and owner of Pioneer Warehousing and Distribution, said. “Allowing men and women to affordably contribute their pre-tax income into a parental leave savings account is a bill that I can truly stand being with no question. This legislation is certainly a step in the right direction for new parents and a great way for businesses to retain and incentivize our employees.”