COVID-19 Youth Sports and Working Families Relief Act

To amend the Internal Revenue Code of 1986 to provide for youth sports, and for other purposes. 1. Short title This Act may be cited as the COVID–19 Youth Sports and Working Families Relief Act 2. Modification of child and dependent care tax credit (a) Allowance of expenses for youth physical activities Section 21(b)(2)(A) and , and (iii) expenses for youth physical activities (within the meaning of section 223(d)(5)). . (b) Exception to camp rule Section 21(b)(2)(A) of such Code (as amended by subsection (a)) is amended by striking Such term Except as provided by clause (iii), such term (c) Dollar limitations Section 221(c) of such Code is amended to read as follows: (c) Dollar limit on amount creditable The amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed— (1) if there is 1 qualifying individual with respect to the taxpayer for such taxable year, the sum of— (A) $3,000 of so much of employment-related expenses as are described in clauses (i) and (ii) of subsection (b)(2)(A), and (B) $6,000 of so much of employment-related expenses as are described in clause (iii) of subsection (b)(2)(A), or (2) if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year, the sum of— (A) $6,000 of so much of employment-related expenses as are described in clauses (i) and (ii) of subsection (b)(2)(A), and (B) $12,000 of so much of employment-related expenses as are described in clause (iii) of subsection (b)(2)(A). The amounts determined under subparagraphs (A) and (B) of paragraph (1) or (2) (whichever is applicable) shall each be reduced by the aggregate amount for the same categories of expenses excludable from gross income under section 129 for the taxable year. . (d) Refundable Section 21(e) of such Code is amended by adding at the end the following: (11) Credit refundable for 2020 In the case of a taxable year beginning in calendar year 2020, the credit allowed under subsection (a) (determined without regard to this paragraph and section 26(a)) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)). . (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2019. 3. Increase in dollar amount of election for dependent care flexible spending arrangements (a) In general Section 125 (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, such benefit shall not be treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $10,000 made to such arrangement for each dependent under such arrangement. (2) Single parent In the case that the employee is an individual who is not married as of the beginning of the taxable year for which the employee elects to participate in the arrangement, paragraph (1) shall be applied by substituting $12,000 $10,000 . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2019. 4. Youth physical activities (a) Health savings accounts Section 223(d) (5) Youth physical activities For purposes of this section, the term medical expenses (A) organized individual and team sports, (B) fitness and exercise, (C) recreation, and (D) other physical activities for youth who have attained age 4 but not age 18. . (b) Flexible spending arrangements Section 106 of such Code is amended by adding at the end the following: (h) Reimbursements for youth physical activities For purposes of this section and section 105, expenses incurred for youth physical activities (within the meaning of section 223(d)(5)) shall be treated as incurred for medical care. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2019. 5. Youth sport providers (a) Establishment of relief fund The Secretary of the Treasury shall create a relief fund in the Treasury for youth sport providers. (b) Funding of relief fund Out of amounts in the Treasury not otherwise appropriated, there is appropriated to the relief fund established under subsection (a) such sums as may be necessary to carry out this section. (c) Distribution of funds (1) In general The Secretary shall disburse amounts from the relief fund established under subsection (a) in such a manner as— (A) to alleviate losses sustained as a result to COVID-19, (B) to be targeted to sustain existing organizations that may, without such assistance, fail or have to severally curtail operations, and (C) aim to maintain youth participation capacity. (2) Priority In making disbursements from the relief fund established under subsection (a), the Secretary shall give priority consideration to programs serving under-served communities. (3) Distribution rate The Secretary shall disburse amounts not less than the following percentages of the total amount in the fund established under subsection (a) within the number of days designated in the following subparagraphs after the date of the enactment of this Act: (A) 25 percent of such amount shall be disbursed within 14 days. (B) 50 percent of such amount shall be disbursed within 30 days. (C) 90 percent of such amount shall be disbursed within 60 days. (d) Youth sport providers The term youth sport provider (1) sports-based youth development organizations, (2) interscholastic sports programs, (3) youth sports providers such as coaches, trainers, and instructors, and (4) youth sport event providers.

Summary: COVID-19 Youth Sports and Working Families Relief Act This bill modifies the tax credit for household and dependent care expenses necessary for employment to include expenses for youth physical activities. Youth physical activities include organized individual and team sports, fitness and exercise, recreation, and other physical activities for youth who have attained age 4, but not age 18. The credit is refundable for taxable years beginning in 2020. The bill also increases the dollar amount of the election for dependent care flexible spending arrangements. The bill directs the Department of the Treasury to establish a relief fund for youth sport providers that directly serve youths age 18 and younger. The fund must disburse amounts to (1) alleviate losses sustained due to COVID-19 (i.e., coronavirus disease 2019), (2) sustain existing organizations that without assistance may fail or have to severely curtail operations, and (3) maintain youth participation capacity.