I 
116TH CONGRESS 
2D SESSION 
H. R. 7997 
To allow individuals to mitigate the financial impact of COVID–19 by taking 
a one-time distribution of flexible spending arrangement funds in certain 
plan years, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 11, 2020 
Mrs. AXNE (for herself and Mr. BALDERSON) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To allow individuals to mitigate the financial impact of 
COVID–19 by taking a one-time distribution of flexible 
spending arrangement funds in certain plan years, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘COVID–19 Health and 
Dependent Care Flexible Spending Account Distribution 
Act’’. 
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SEC. 2. SPECIAL DISPOSITION RULES FOR UNUSED BENE-
FITS 
IN 
FLEXIBLE 
SPENDING 
ARRANGE-
MENTS OF INDIVIDUALS IN DURING CERTAIN 
PLAN YEARS. 
(a) FSAS MAY ALLOW QUALIFIED DISTRIBUTION.— 
For purposes of sections 106, 125, and 129 of the Internal 
Revenue Code of 1986, a flexible spending arrangement 
may allow a qualified distribution. 
(b) TAXES APPLIED TO CERTAIN DISTRIBUTIONS.— 
For purposes of sections 125(a) and 129(a) of such Code, 
such sections shall not apply to any benefit distributed 
under subsection (a) from a flexible spending arrangement 
for a use other than the qualifying benefit for which such 
arrangement was established. 
(c) SPECIAL RULE FOR DISPOSITION OF UNUSED 
BENEFITS.—For purposes of such Code, a plan shall not 
fail to be treated as a cafeteria plan, health flexible spend-
ing arrangement, or dependent care flexible spending ar-
rangement merely because such arrangement provides for 
a qualified distribution. 
(d) QUALIFIED DISTRIBUTION.—For purposes of this 
section, the term ‘‘qualified distribution’’ means a one- 
time distribution in a qualifying plan year to an individual 
of all or a portion of the balance in the employee’s account 
under a cafeteria plan, health flexible spending arrange-
ment, or dependent care flexible spending arrangement. 
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(e) QUALIFYING PLAN YEAR.—The term ‘‘qualifying 
plan year’’ means plan year 2020, plan year 2021, and 
any plan year that falls during a calendar year in which 
a national emergency is declared by the President under 
the National Emergencies Act (50 U.S.C. 1601 et seq.) 
with respect to the Coronavirus Disease 2019 (COVID– 
19). 
(f) GUIDANCE.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall issue guidance with respect 
to the interaction between a qualified distribution under 
subsection (a) and the nondiscrimination testing provi-
sions of section 125 of such Code. 
Æ 
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