S. 4928: COVID–19 Commuter Benefits Distribution Act

This bill would let certain employees take a one-time payment from unused balances in their transportation fringe benefit accounts—for example, commuter benefit accounts set up through payroll deductions for transit, parking, or similar work travel expenses.

What the bill allows

• An employee could receive a one-time distribution from a qualifying transportation benefit account within 6 months after the bill becomes law.
• The payment could be made only up to the highest balanceMarch 13, 2020, and December 31, 2023.
• The payment would be treated as taxable income to the employee in the year it is paid.

How it would work with existing commuter benefits

• The bill applies to accounts funded under a compensation reduction agreement, meaning benefits funded through employee pay reductions arranged with an employer.
• These accounts are the kind used for benefits that are normally excluded from income under federal tax law as qualified transportation fringes.
• If an employee takes this special payment, it would not affect whether other payments from the account can still qualify as normal transportation fringe benefits under the tax code.

Practical effect

• Employees who built up unused commuter benefit balances during the COVID-19 period could access that money in cash.
• The bill is aimed at amounts that may have remained unused because commuting patterns changed during the pandemic.
• It does not create a new ongoing benefit; it only authorizes a single withdrawal under the bill’s rules.

Relevant Companies

None found