Title: COVID–19 Health and Dependent Care Flexible Spending Account Distribution Act
Policy area: Taxation

Summary:
COVID-19 Health and Dependent Care Flexible Spending Account Distribution Act
This bill allows a one-time distribution of amounts in a flexible spending arrangement in plan years 2020, 2021, and any plan year during a calendar year in which the President declares a national emergency with respect to COVID-19 (i.e., coronavirus disease 2019)

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7997 Introduced in House (IH)]

<DOC>






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 Representatives 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''.

SEC. 2. SPECIAL DISPOSITION RULES FOR UNUSED BENEFITS IN FLEXIBLE 
              SPENDING ARRANGEMENTS 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 spending arrangement, or dependent care flexible 
spending arrangement 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 arrangement, or dependent care flexible spending 
arrangement.
    (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 provisions of section 125 of such Code.
                                 <all>