Page:United States Statutes at Large Volume 100 Part 3.djvu/702

 100 STAT. 2510

PUBLIC LAW 99-514—OCT. 22, 1986 Internal Revenue Code of 1986 with respect to coverage required by the amendments made by this section.

SEC. 1162. 2-YEAR EXTENSION OF EXCLUSIONS FOR EDUCATIONAL ASSISTANCE PROGRAMS AND GROUP LEGAL PLANS. (a) EDUCATIONAL ASSISTANCE PROGRAMS.—

(1) EXTENSION.—Subsection (d) of section 127 (relating to termination of exclusion for amounts received under educational assistance programs) is amended by striking out "1985" and inserting in lieu thereof "1987". (2) INCREASE IN AMOUNT.—Paragraph (2) of section 127(a) is amended by striking out "$5,000" each place it appears in the text and the heading thereof and inserting in lieu thereof "$5,250". (b) GROUP LEGAL PLANS.—Subsection (e) of section 120 (relating to

termination of exclusion for amounts received under qualified group legal services plans) is amended by striking out "1985 and inserting in lieu thereof "1987". (c) EFFECTIVE DATES.— (1) SUBSECTION (a).—The amendments made by subsection (a)

shall apply to taxable years beginning after December 31, 1985. (2) SUBSECTION (b).—The amendment made by subsection (b) shall apply to years ending after December 31, 1985. (3) CAFETERIA PLAN WITH GROUP LEGAL BENEFITS.—If, within 60 days after the date of the enactment of this Act, an employee elects under a cafeteria plan under section 125 of the Internal Revenue Code of 1986 coverage for group legal benefits to which section 120 of such Code applies, such election may, at the election of the taxpayer, apply to all legal services provided during 1986. The preceding sentence shall not apply to any plan which on August 16, 1986, offered such group legal benefits under such plan. SEC. 1163. $5,000 LIMIT ON DEPENDENT CARE ASSISTANCE EXCLUSION.

(a) GENERAL RULE.—Subsection (a) of section 129 (relating to dependent care assistance programs) is amended to read as follows: "(a) EXCLUSION.—

"(1) IN GENERAL.—Gross income of an employee does not include amounts paid or incurred by the employer for dependent care assistance provided to such employee if the assistance is furnished pursuant to a program which is described in subsection (d). "(2) LIMITATION OF EXCLUSION.—The aggregate amount ex-

cluded from the gross income of the taxpayer under this section for any taxable year shall not exceed $5,000 ($2,500 in the case of a separate return by a married individual). For purposes of the preceding sentence, marital status shall be determined under the rules of paragraphs (3) and (4) of section 21(e)." 0>) TREATMENT OF ONSITE FACILITIES.—Subsection (e) of section 129 is amended by adding at the end thereof the following new paragraph: "(8) TREATMENT OF ONSITE FACILITIES.—In the case of an onsite facility, except to the extent provided in regulations, the amount excluded with respect to any dependent shall be based on— "(A) utilization, and

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