H.R. 9428: COVID–19 Commuter Benefits Distribution Act

This bill would create a temporary option for some workers to withdraw unused money from certain commuter benefit accounts that were funded through payroll deductions.

What money could be withdrawn

The bill applies to specified transportation fringe benefit accounts, which are workplace accounts used for commuter benefits such as transit or parking expenses. It would allow a one-time payment from one of these accounts to the employee who owns the benefit.

When and how the withdrawal would work

The one-time withdrawal would have to be made within 6 months after the bill becomes law. The amount paid out could not be more than the highest balance in the account at any point between March 13, 2020, and December 31, 2023.

Tax treatment

The withdrawn amount would count as taxable income for the year it is paid to the employee. In other words, it would not be tax-free if taken out under this provision.

Effect on remaining commuter benefits

If an employee takes this special payout, it would not affect whether other payments from the same account can still qualify as tax-favored commuter benefits under existing tax rules. The bill says the rest of the account would be evaluated without counting the special withdrawal.

Who would be affected

The bill would mainly affect employees who had commuter benefit balances left unused from the pandemic period and whose employers maintained these accounts under salary-reduction agreements. Employers and plan administrators would need to allow and process the one-time distribution if the bill becomes law.

Relevant Companies

None found.