PLAY Act of 2026

Bill Number

H.R. 6979

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-01-08: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-01-21T16:05:14Z

AI-Generated Summary

Purpose of the Legislation

The Promoting Lifelong Activity for Youth Act of 2026 (PLAY Act of 2026) aims to encourage physical activity and healthy habits among children by providing tax incentives for youth sports and exercise expenses and creating a federal grant program to expand access to recreational youth sports. It seeks to reduce financial barriers for families and promote socialization through non-competitive activities.

Key Provisions

• Tax Credit Modifications for Child and Dependent Care:
• Expands the Child and Dependent Care Tax Credit (a tax break for working parents to cover care costs for children under 13) to include "youth physical activities" as eligible expenses, such as fees for fitness memberships, exercise programs, or equipment for kids aged 4 to 18.
• Removes the prior exclusion for camp-like programs specifically for these physical activities.
• Increases the annual expense limit eligible for the credit to $4,000 for one child (up from $3,000 previously) or $7,000 for two or more children (up from $6,000), reduced by any employer-provided dependent care benefits excluded from income.

• Dependent Care Flexible Spending Arrangements (FSAs):
• Raises the annual employee contribution limit for dependent care FSAs (pre-tax accounts for care expenses) to $10,000 per dependent, or $12,000 for single parents. FSAs allow workers to set aside salary before taxes for qualifying expenses.

• Medical Expense Deductions for Youth Physical Activities:
• Adds "youth physical activities" as deductible medical expenses under the tax code, covering registration fees, instruction, and equipment for physical exercise or sports for dependents aged 4 to 18.
• Defines eligible activities narrowly: fitness facility memberships (with requirements like no private clubs or golf facilities, and compliance with anti-discrimination laws), non-competitive exercise programs, and basic equipment (e.g., up to $250 per sports item, excluding tournament fees or private lessons).
• Caps total deductions at $1,000 per taxpayer ($2,000 for joint filers or heads of household).
• Excludes competitive or elite components, like travel teams, and treats videos/books as eligible if they provide exercise instruction.

• HHS Grant Program for Recreational Youth Sports:
• Directs the Secretary of Health and Human Services (HHS) to award competitive grants starting one year after enactment to expand access to recreational (non-competitive) youth sports, focusing on lowering costs and promoting health and socialization.
• Eligible recipients include local governments, nonprofits (tax-exempt under IRS Section 501(c)(3)), Tribal organizations, and veterans groups (tax-exempt under IRS Section 501(c)(19)); excludes schools and colleges.
• Grants (2-year terms, $5,000–$50,000 each) can fund participation subsidies or fee reductions but not facility construction/upgrades or competitive programs (e.g., no elite travel teams; casual games with scores are allowed).
• Requires grants to mostly supplement (not replace) other funding, except to eliminate fees for low-income families.
• Mandates a report to Congress within three years assessing program outcomes.
• Authorizes $200 million in funding for fiscal years 2026–2030.

All tax changes apply to tax years starting after December 31, 2025.

Significant Changes to Existing Law

• Child Care Tax Credit: Previously limited to childcare like daycare or summer camps; now includes youth physical activities, with higher dollar caps to account for added expenses.
• Dependent Care FSAs: Increases the contribution limit from $5,000 (flat cap since 1986, unadjusted for inflation in recent years) to a per-dependent amount, providing more flexibility for families with multiple children.
• Medical Expense Deductions: Introduces a new category for youth activities, previously not covered as "medical" (medical deductions generally require a doctor's recommendation for health-related costs); imposes strict limits to prevent abuse.
• New Grant Program: Creates a standalone HHS initiative outside existing sports funding (e.g., no tie to education or parks departments), emphasizing recreational over competitive youth sports.

Potential Impacts

• On Citizens: Families with children aged 4–18 could save hundreds to thousands in taxes annually on sports/exercise costs, making activities more affordable and potentially increasing participation in physical programs. Low-income or single-parent households may benefit most from higher FSA limits and grants reducing fees.
• On Government Agencies: IRS will administer expanded tax credits/deductions, increasing processing and compliance needs. HHS must establish and oversee the grant program, including applications and reporting, with $200 million in new spending potentially straining budgets if not fully appropriated.
• On International Relations: No direct impact; the bill is domestic-focused on U.S. tax policy and health grants.

Main Stakeholders Affected

• Families and Children: Primary beneficiaries, especially working parents seeking tax relief for youth fitness/sports; promotes equity by targeting ages 4–18 and excluding elite programs.
• Eligible Grant Recipients: Local governments, nonprofits, Tribal organizations, and veterans groups running recreational programs; schools and colleges are explicitly excluded to focus on community-based efforts.
• Taxpayers and Employers: Broader taxpayers fund the tax expenditures (estimated revenue loss) and grants; employers offering FSAs may see increased employee use.
• Federal Agencies: IRS (tax enforcement) and HHS (grant administration) bear implementation costs.

Notable Legal, Constitutional, or Political Implications

• Legal: Enhances tax equity by broadening "dependent care" to include preventive health activities, aligning with IRS rules on medical deductions (which require expenses to mitigate health risks like obesity). Grant restrictions ensure compliance with anti-discrimination laws and prevent misuse for competitive sports, reducing litigation risks.
• Constitutional: No apparent challenges; tax incentives and grants fall under Congress's taxing/spending powers (Article I, Section 8). Inclusion of Tribal organizations respects federal trust responsibilities.
• Political: Supports bipartisan goals of child health and family support (introduced by Democrats and Republicans), but could spark debate over fiscal costs (tax cuts plus $200 million spending) amid budget concerns. May influence future wellness policies by prioritizing non-competitive recreation over school sports.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Gottheimer, Josh [D-NJ-5]

Cosponsors (1)

Rep. Lawler, Michael [R-NY-17]

Recent Actions

• 2026-01-08: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2026-01-08: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2026-01-08: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2026-01-08: Introduced in House
• 2026-01-08: Introduced in House

Bill Versions

• Promoting Lifelong Activity for Youth Act of 2026 — issued 2026-01-08 — PDF (11 pages)