1. Short title This Act may be cited as the Promoting Lifelong Activity for Youth Act of 2023 or the PLAY Act of 2023 . 2. Modification of child and dependent care tax credit (a) Allowance of expenses for youth physical activities Section 21(b)(2)(A) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (i), by striking the period at the end of clause (ii) and inserting , and , and by inserting after clause (ii) the following: (iii) expenses for youth physical activities (within the meaning of section 213(d)(12)). . (b) Exception to camp rule Section 21(b)(2)(A) of such Code (as amended by subsection (a)) is amended by striking Such term and inserting Except as provided by clause (iii), such term . (c) Dollar limitations Section 21(c) of such Code is amended to read as follows: (c) Dollar limit on amount creditable (1) In general The amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed— (A) if there is 1 qualifying individual with respect to the taxpayer for such taxable year, $4,000, or (B) if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year, $7,000. (2) Reduction The amount determined under paragraph (1) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 3. Increase in dollar amount of election for dependent care flexible spending arrangements (a) In general Section 125 of the Internal Revenue Code of 1986 is amended by redesignating subsections (k) and (l) as subsections (l) and (m) and inserting after subsection (j) the following: (k) Limitation on dependent care flexible spending arrangements (1) In general For purposes of this section, if a benefit is provided under a cafeteria plan through employer contributions to a dependent care flexible spending arrangement,