PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3489
(D) by inserting "with respect to such dependent" after "provided" in subparagraph (B). (2)(A) Paragraph (2) of section 129(a) of the 1986 Code is amended to read as follows: "(2) LIMITATION OF EXCLUSION.—
"(A) IN GENERAL.—The amount which may be excluded under paragraph (1) for dependent care assistance with respect to dependent care services provided during a taxable year shall not exceed $5,000 ($2,500 in the case of a separate return by a married individual). (B) YEAR OF INCLUSION.—The amount of any excess
under subparagraph (A) shall be included in gross income in the taxable year in which the dependent care services were provided (even if payment of dependent care assistance for such services occurs in a subsequent taxable year). "(C) MARITAL STATUS.—For purposes of this paragraph, marital status shall be determined under the rules of paragraphs (3) and (4) of section 21(e)." (B) Section 6051(a) of the 1986 Code is amended by striking out the period at the end of paragraph (8) and inserting in lieu thereof ", and", and by adding a t the end thereof the following new paragraph: "(9) the total amount incurred for dependent care assistance with respect to such employee under a dependent care assistance program described in section 129(d)." (C)(i) Except as provided in this subparagraph, the amend- 26 USC 129 note. ments made by this paragraph shall apply to taxable years beginning after December 31, 1987. (ii) A taxpayer may elect to have the amendment made by subparagraph (A) apply to taxable years beginning in 1987, (iii) In the case of a taxpayer not making an election under clause (ii), any dependent care assistance provided in a tsixable year beginning in 1987 with respect to which reimbursement was not received in such taxable year shall be treated as provided in the taxpayer's first taxable year beginning after December 31, 1987. (d) AMENDMENT RELATED TO SECTION 1164 OF THE REFORM ACT.—
Section 119(d)(2) of the 1986 Code is amended— (1) by striking out "(as of the close of the calcmdar year in which the taxable year begins)" in subparagraph (A)(i), and (2) by adding at the end thereof the following: "The appraised value under subparagraph (A)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins." (e) AMENDMENTS RELATED TO SECTION 1166 OF THE REFORM
ACT.—Section 7701(a)(20) of the 1986 Code (defining employee) is amended— (1) by striking out "106, and 125" and inserting in lieu thereof "and 106", and (2) by inserting "and for purposes of applying section 125 with respect to cafeteria plans," before "the term". (f) AMENDMENTS RELATED TO SECTION 1168 OF THE REFORM ACT.—
(1) Paragraph (1) of section 134(b) of the 1986 Code is amended by striking out "or regulation thereunder" and inserting in lieu thereof ", regulation, or administrative practice".
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