I 117th CONGRESS 1st Session H. R. 4902 IN THE HOUSE OF REPRESENTATIVES July 30, 2021 Mrs. Watson Coleman (for herself, Ms. DeLauro , Ms. Lee of California , and Mrs. Carolyn B. Maloney of New York ) introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committee on the Judiciary , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to treat diapers as qualified medical expenses; and to prohibit States and local governments to impose a tax on the retail sale of diapers.

1. Short title This Act may be cited as the Improving Diaper Affordability Act of 2021 . 2. Findings Congress finds the following: (1) One in 3 families with infants and toddlers struggles to provide the diapers their children need. (2) Low-income families with infants spend 14 percent of their income on diapers alone, which is roughly $936 per child, per year. (3) Low-income families spend twice as much on diapers for their children, compared to families who have the means to buy diapers in bulk at a lower price. (4) More than 5 million children under the typical potty training age of 3-years-old live in low-income families. (5) Diaper need affects not only the health and well-being of the child but it can affect the economic security of the entire family. (6) Over half of families in diaper need who rely on child care in order to go to work or school, missed work or school in the preceding month because they did not have the diapers they needed to put their child in child care. (7) No State or Federal child safety-net program allocates dollars specifically for the purchase of diapers. (8) Since the start of the COVID–19 pandemic, diaper banks around the country have experienced double, triple, or greater increase in demand for diapers due to the pandemic and economic shutdown. 3. Inclusion of diapers as qualified medical expenses (a) Health savings accounts Section 223(d)(2) of the Internal Revenue Code of 1986 is amended by adding at the end of subparagraph (A) the following: Notwithstanding the first sentence, amounts paid for diapers shall be treated as paid for medical care. . (b) Archer MSA s Section 220(d)(2)(A) of such Code is amended by adding at the end the following: Notwithstanding the first sentence, amounts paid for diapers shall be treated as paid for medical care. . (c) Health flexible spending arrangements and health reimbursement arrangements Section 106 of such Code is amended by adding at the end the following new subsection: (f) Reimbursements for diapers For purposes of this section and section 105, expenses incurred for diapers shall be treated as incurred for medical care. . (d) Dependent care assistance and dependent care flexible spending arrangements Section 129(e)(1) of such Code is amended by adding at the end the following: Such term shall include expenses incurred for diapers. . (e) Limited purpose flexible spending arrangements and reimbursement arrangements Section 223(c)(1)(B) of such Code is amended by striking and at the end of clause (ii), by striking the period at the end of clause (iii) and inserting , and , and by adding at the end the following new clause: (iv) coverage under a flexible spending arrangement, or health reimbursement arrangement, that pays or reimburses for coverage described in clause (ii) (other than long-term care services and, in the case of a flexible spending arrangement, other than through insurance). Coverage shall not fail to be treated as coverage described in the preceding sentence solely by reason of paying or reimbursing expenses incurred for diapers. . (f) Effective dates (1) Distributions from health savings accounts The amendments made by subsections (a) and (b) shall apply to amounts paid after December 31, 2020. (2) Reimbursements The amendment made by subsections (c) and (d) shall apply to expenses incurred after December 31, 2020. (3) Limited purpose HSA and HRA The amendments made by subsection (e) shall apply to months beginning after December 31, 2020. 4. Prohibition of retail sales taxes A State, or unit of local government of a State, may not impose a sales tax on the retail purchase of diapers.