COVID–19 Commuter Benefits Distribution Act
Officially: “COVID–19 Commuter Benefits Distribution Act” Read the full text
What it does
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1Short title
This section would let this Act be called the 'COVID-19 Commuter Benefits Distribution Act.'
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1. Short title This Act may be cited as the COVID–19 Commuter Benefits Distribution Act .
2Treatment of certain distributions from transportation fringe benefit accounts
This section would let an employer make a one-time payment, called a 'qualified payment,' to an employee from the employee's transportation fringe benefit account. That account is money an employee's employer sets aside for the employee under a compensation reduction agreement (a pre-tax payroll deduction arrangement) that pays out amounts excludable from tax under section 132 of the Internal Revenue Code as a qualified transportation fringe benefit, and that lets any amount left over at the end of a month carry forward to the next month, subject to any requirements or limits the agreement, the Secretary of the Treasury, or the Secretary's delegate may set. The one-time payment would have to be made during the 6-month period that starts on the date this Act becomes law, and it could not exceed the highest balance the account held at any point between March 13, 2020, and December 31, 2023. Unlike ordinary tax-free transportation fringe benefit payments, this one-time payment would count as part of the employee's taxable gross income for the year it is paid. Making this one-time payment would not affect whether any other payment from the same account still qualifies as a tax-free transportation fringe benefit under section 132; that other payment's tax treatment would be worked out as though this one-time payment had not been made.
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2. Treatment of certain distributions from transportation fringe benefit accounts (a) In general In the case of any qualified payment from a specified transportation fringe benefit account— (1) such qualified payment shall be includible in the gross income of the employee for the taxable year in which such qualified payment is made, and (2) the determination of whether any other payment from such account is a qualified transportation fringe for purposes of section 132 of the Internal Revenue Code of 1986 shall be determined without regard to such qualified payment. (b) Qualified payment For purposes of this section, the term qualified payment means a one-time payment made during the 6-month period beginning on the date of the enactment of this Act from a specified transportation fringe benefit account to the employee for whose benefit such account is maintained but only to the extent that such payment does not exceed the highest balance of such account during the period beginning on March 13, 2020, and ending on December 31, 2023. (c) Specified transportation fringe benefit account For purposes of this section, the term specified transportation fringe benefit account means, with respect to any employee, amounts set aside by such employee’s employer under a compensation reduction agreement which— (1) provides for payments to such employee of amounts which are excludible under section 132 of the Internal Revenue Code of 1986 as a qualified transportation fringe (determined after the application of subsection (a)), and (2) provides that unused amounts at the end of a month may be carried forward to the succeeding month (subject to such requirements or limitations as such agreement, the Secretary of the Treasury, or the Secretary’s delegate, may provide).
Where it is
In the Senate.