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HR 9428

COVID–19 Commuter Benefits Distribution Act

119th Congress Introduced by Andrew Garbarino and 3 co-sponsors

H.R. 9428 allows a one-time, six-month lump-sum distribution from certain pre-tax transit accounts, taxed in the year received, without changing future fringe benefit classificatio

Introduced in House
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WeVote Research Nonpartisan
Bill Summary · HR 9428

Overview

  • Bill: H.R. 9428
  • Session: 119th Congress, 2nd Session
  • Title: COVID–19 Commuter Benefits Distribution Act
  • Sponsor(s): Rep. Laura Gillen; Co-sponsors Rep. Nick LaLota, Rep. Tom Suozzi, Rep. Andrew Garbarino
  • Filed: June 24, 2026
  • Status: Referred to the House Ways and Means Committee

Purpose and Intent

The bill seeks to authorize a one-time distribution from certain transportation fringe benefit accounts to employees, allowing affected workers to receive a lump-sum payment during a defined six-month window after enactment. The policy is framed as a COVID-19-related relief measure, aiming to provide liquidity to employees who held transportation fringe benefits in pre-pandemic structures.

Key Provisions

  • Section 2(a) General Rule:

    • Any qualified payment from a specified transportation fringe benefit account would be includible in the employee’s gross income for the taxable year in which the payment is made.
    • The determination of whether any other payment from the same account remains a qualified transportation fringe benefit for purposes of Section 132 of the Internal Revenue Code would be unaffected by this qualified payment (i.e., treated independently for future fringe benefit classification).

  • Section 2(b) Qualified Payment:

    • Defines a “qualified payment” as a one-time distribution made during a six-month period beginning on the enactment date.
    • The payment is from a specified transportation fringe benefit account to the employee for whom the account is maintained.
    • The amount of the qualified payment may not exceed the highest balance of the account during March 13, 2020, through December 31, 2023.

  • Section 2(c) Specified Transportation Fringe Benefit Account:

    • The term refers to amounts set aside by an employer under a compensation reduction agreement.
    • The agreement must provide for payments to employees that are excludible under Section 132 as a qualified transportation fringe (after applying the treatment described in subsection (a)).
    • The agreement may allow unused amounts at the end of a month to be carried forward to the next month, subject to applicable requirements or limitations established by the agreement, the Secretary of the Treasury, or the Secretary’s delegate.

Who/What Is Affected

  • Employee beneficiaries holding amounts in specified transportation fringe benefit accounts (typically employer-sponsored pre-tax transit benefits).
  • Employers that maintain this type of compensation reduction agreement and administer the fringe benefit accounts.

Procedural and Timeline Aspects

  • Effective Date: The bill creates a six-month window for the one-time qualified payment, measured from the date of enactment.
  • Tax Treatment: The one-time qualified payment is included in the employee’s gross income for the tax year in which the payment is made.
  • Interaction with Other Benefits: The bill specifies that this one-time payment does not affect the ongoing qualification status of other payments from the same account for Section 132 purposes.

Potential Impacts

  • Tax Implication for Employees: The lump-sum distribution would be included in current-year gross income, which could affect tax withholding and liability for the recipient.
  • Liquidity Relief: Provides a mechanism for employees to access previously held transit benefits during a period of post-pandemic financial recovery.
  • Administrative Impact: Requires employers to administer a one-time distribution under the defined constraints and coordinate with tax reporting for the affected employees.

Notes

  • The bill does not alter the overarching framework of qualified transportation fringe benefits beyond permitting a one-time distribution with specified tax treatment.
  • Specific dollar limits are tied to the historical account balance (highest balance from March 13, 2020, through December 31, 2023).

Compiled from official sources — confirm details with the bill’s official record.

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