Bill Summary
This legislation, called the "COVID-19 Dependent Care Flexible Spending Arrangement Rollover Act of 2020", allows for the unused funds in a dependent care flexible spending arrangement (FSA) at the end of the plan year 2020 to be carried over to the following plan year 2021. This bill was enacted by the Senate and House of Representatives of the United States of America in Congress assembled. The Secretary of the Treasury (or their delegate) is responsible for issuing regulations or guidance that permit the rollover of the unused balance of an FSA to the following year. This legislation was put in place in response to the ongoing COVID-19 pandemic to provide flexibility for individuals who may have had a change in dependent care needs during 2020.
Possible Impacts
1. Benefit for parents with young children: This legislation allows for any unused funds in a dependent care flexible spending arrangement to be rolled over to the following year, providing financial relief for parents who may have been unable to utilize these funds due to the COVID-19 pandemic. This could potentially help families with young children who rely on these funds to cover the costs of childcare.
2. Impact on employers and employees: This legislation requires the Secretary of the Treasury to issue regulations or guidance for the rollover of unused funds, which may affect employers who offer these arrangements as a benefit to their employees. They may need to adjust their policies and procedures to accommodate this rollover and communicate these changes to their employees.
3. Potential tax implications: Any unused funds rolled over to the following plan year may have tax implications for individuals. They may need to report these funds as income on their tax returns, potentially affecting their tax liability for the year.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6958 Introduced in House (IH)]
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116th CONGRESS
2d Session
H. R. 6958
To provide that the unused balance of a dependent care flexible
spending arrangement at the end of plan year 2020 may be rolled over to
the following plan year.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 22, 2020
Mrs. Axne (for herself and Mr. Stauber) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To provide that the unused balance of a dependent care flexible
spending arrangement at the end of plan year 2020 may be rolled over to
the following plan year.
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 Dependent Care Flexible
Spending Arrangement Rollover Act of 2020''.
SEC. 2. ROLLOVER OF UNUSED BALANCE OF DEPENDENT CARE FLEXIBLE SPENDING
ARRANGEMENTS TO PLAN YEAR 2021.
As soon as practicable after the date of the enactment of this Act,
the Secretary of the Treasury (or the Secretary's delegate) shall issue
regulations or other guidance that permit the unused balance
(determined as of the end of plan year 2020) of any dependent care
flexible spending arrangement to be rolled over to plan year 2021.
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