1. Short title This Act may be cited as the Working Parents Tax Relief Act . 2. Increase in amount excludable for dependent care assistance and dependent care flexible spending arrangements (a) In general Section 129(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking $5,000 ($2,500 and inserting $7,500 ( 1/2 such amount . (b) Inflation adjustment Section 129(a)(2) of such Code is amended by adding at the end the following new subparagraph: (D) Adjustment for inflation In the case of any taxable year beginning after December 31, 2017, the $7,500 amount in subparagraph (A) shall be increased by an amount equal to— (i) such amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting calendar year 2016 for calendar year 1992 in subparagraph (B) thereof. If any increase determined under this subparagraph is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016. 3. Carryover of unused dependent care benefits in cafeteria plans and flexible spending arrangements (a) In general Section 125(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (3) Carryover of unused dependent care benefits Notwithstanding paragraph (2)(A)— (A) In general For purposes of this title, a plan or other arrangement shall not fail to be treated as a cafeteria plan or dependent care flexible spending arrangement solely because qualified benefits under such plan include a dependent care flexible spending arrangement under which unused dependent care benefits may be carried forward to the succeeding plan year of such flexible spending arrangement. (B) Dependent care flexible spending arrangement For purposes of this paragraph, the term dependent care flexible spending arrangement means a flexible spending arrangement (as defined