HR6979-119

What This Bill Does

The PLAY Act of 2026 lowers youth physical activity costs through tax and grant changes. It adds youth physical activity expenses to the child and dependent care tax credit and raises the expense caps to $4,000 for one qualifying individual and $7,000 for two or more. It raises dependent care flexible spending arrangement salary-reduction limits to $10,000 per dependent, or $12,000 for unmarried employees. It also treats youth physical activities as medical expenses under section 213, covering registration costs, fees, facility memberships, instruction, videos, books, and qualifying equipment for dependents age 4 through 17, with a $1,000 annual cap or $2,000 for joint filers or heads of household. The bill excludes tournament entries, private lessons, training, camps, travel, lodging, and equipment above specified limits. Finally, HHS must create a competitive recreational youth sports grant program for local governments, nonprofits, Tribal organizations, and veterans organizations to reduce family fees, expand participation capacity, and promote healthy habits, physical activity, and socialization, with grants of $5,000 to $50,000 for two years and $200 million authorized for fiscal years 2026 through 2030.

Who Benefits and How

Families with children ages 4 through 17 benefit from tax relief for eligible sports, fitness, facility, instruction, and equipment expenses. Single parents benefit from the higher $12,000 dependent care FSA limit. Local governments, nonprofit youth sports organizations, Tribal organizations, and veterans organizations benefit from HHS grants to reduce participation fees and expand recreational capacity. Children benefit if lower costs increase access to healthy physical activity and socialization.

Who Bears the Burden and How

IRS and Treasury staff must update tax forms, guidance, and enforcement rules for new credit, FSA, and medical-expense categories. Employers and cafeteria plan administrators must update dependent care FSA limits and payroll systems. Families must track eligible and excluded expenses, age limits, caps, and documentation. HHS grant staff must run a new competition, enforce restrictions against facility construction or elite travel sports, monitor two-year grants, and report to Congress.

Key Provisions

• Expands the child and dependent care credit to include qualifying youth physical activity expenses.
• Raises dependent care FSA limits to $10,000 per dependent and $12,000 for unmarried employees.
• Adds youth physical activities to medical expenses with age, facility, equipment, and dollar limits.
• Creates HHS recreational youth sports grants for local governments, nonprofits, Tribal organizations, and veterans organizations.
• Authorizes $200 million for fiscal years 2026 through 2030 for recreational youth sports grants.