1. Short title This Act may be cited as the COVID–19 Health and Dependent Care Flexible Spending Account Distribution Act . 2. Special disposition rules for unused benefits in flexible spending arrangements of individuals in during certain plan years (a) FSAs may allow qualified distribution For purposes of sections 106, 125, and 129 of the Internal Revenue Code of 1986, a flexible spending arrangement may allow a qualified distribution. (b) Taxes applied to certain distributions For purposes of sections 125(a) and 129(a) of such Code, such sections shall not apply to any benefit distributed under subsection (a) from a flexible spending arrangement for a use other than the qualifying benefit for which such arrangement was established. (c) Special rule for disposition of unused benefits For purposes of such Code, a plan shall not fail to be treated as a cafeteria plan, health flexible spending arrangement, or dependent care flexible spending arrangement merely because such arrangement provides for a qualified distribution. (d) Qualified distribution For purposes of this section, the term qualified distribution means a one-time distribution in a qualifying plan year to an individual of all or a portion of the balance in the employee’s account under a cafeteria plan, health flexible spending arrangement, or dependent care flexible spending arrangement. (e) Qualifying plan year The term qualifying plan year means plan year 2020, plan year 2021, and any plan year that falls during a calendar year in which a national emergency is declared by the President under the National Emergencies Act ( 50 U.S.C. 1601 et seq.) with respect to the Coronavirus Disease 2019 (COVID–19). (f) Guidance The Secretary of the Treasury (or the Secretary’s delegate) shall issue guidance with respect to the interaction between a qualified distribution under subsection (a) and the nondiscrimination testing provisions of section 125 of such Code.