HouseH.R. 9480119th Congress
To amend the Internal Revenue Code of 1986 to allow a deduction for amounts contributed to home savings accounts, and for other purposes.
Full Text
Official text as published. Use Ctrl+F / Cmd+F to search within the document.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9480 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 9480
To amend the Internal Revenue Code of 1986 to allow a deduction for
amounts contributed to home savings accounts, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 25, 2026
Mr. Perry introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow a deduction for
amounts contributed to home savings accounts, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. HOME SAVINGS ACCOUNTS.
(a) In General.--Part VII of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section 213
the following new section:
``SEC. 214. HOME SAVINGS ACCOUNTS.
``(a) Deduction Allowed.--In the case of an individual, there shall
be allowed as a deduction for the taxable year an amount equal to the
aggregate amount paid in cash during such taxable year by such
individual to a home savings account of such individual.
``(b) Limitations.--
``(1) In general.--The amount allowable as a deduction
under subsection (a) to an individual for the taxable year
shall not exceed $10,000 ($20,000 in the case of a married
individual filing a joint return).
``(2) Denial of deduction to dependents.--No deduction
shall be allowed under this section to any individual with
respect to whom a deduction under section 151 is allowable to
another taxpayer for a taxable year beginning in the calendar
year in which such individual's taxable year begins.
``(c) Home Savings Accounts.--For purposes of this section--
``(1) In general.--The term `home savings account' means a
trust created or organized in the United States as a home
savings account exclusively for the purpose of paying the
qualified housing expenses of the account beneficiary, but only
if the written governing instrument creating the trust meets
the following requirements:
``(A) Except in the case of a rollover contribution
described in subsection (e)(5), no contribution will be
accepted--
``(i) unless it is in cash and made by the
account beneficiary, or
``(ii) to the extent such contribution,
when added to previous contributions to the
trust for the calendar year, exceeds the dollar
amount in effect under subsection (b)(1).
``(B) The trustee is a bank (as defined in section
408(n)), an insurance company (as defined in section
816), or another person who demonstrates to the
satisfaction of the Secretary that the manner in which
such person will administer the trust will be
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested
in life insurance contracts.
``(D) The assets of the trust will not be
commingled with other property except in a common trust
fund or common investment fund.
``(E) The interest of an individual in the balance
in such individual's account is nonforfeitable.
``(2) Qualified housing expenses.--
``(A) In general.--The term `qualified housing
expenses' means, with respect to an account
beneficiary, amounts paid by such beneficiary--
``(i) for the purchase of a principal
residence for such beneficiary, or
``(ii) to make excess payments on any
remaining principal of the amount of
acquisition indebtedness with respect to such
residence.
``(B) Principal residence; purchase.--The terms
`principal residence' and `purchase' have the meaning
given such terms in section 36(c).
``(C) Acquisition indebtedness.--The term
`acquisition indebtedness' means any indebtedness which
is incurred with respect to the purchase of the
principal residence of the account beneficiary and is
secured by such residence. Such term also includes any
indebtedness secured by such residence resulting from
the refinancing of indebtedness meeting the
requirements of the preceding sentence (or this
sentence); but only to the extent the amount of the
indebtedness resulting from such refinancing does not
exceed the amount of the refinanced indebtedness.
``(3) Account beneficiary.--The term `account beneficiary'
means the individual on whose behalf the home savings account
was established.
``(4) Certain rules apply.--Rules similar to the following
rules shall apply for purposes of this section:
``(A) Section 219(d)(2) (relating to no deduction
for rollovers).
``(B) Section 219(f)(3) (relating to time when
contributions deemed made).
``(C) Section 408(g) (relating to community
property laws).
``(D) Section 408(h) (relating to custodial
accounts).
``(d) Tax Treatment of Accounts.--
``(1) In general.--A home savings account is exempt from
taxation under this subtitle unless such account has ceased to
be a home savings account. Notwithstanding the preceding
sentence, any such account is subject to the taxes imposed by
section 511 (relating to imposition of tax on unrelated
business income of charitable, etc. organizations).
``(2) Account terminations.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to home
savings accounts, and any amount treated as distributed under
such rules shall be treated as not used to pay qualified
housing expenses.
``(e) Tax Treatment of Distributions.--
``(1) Amounts used for qualified housing expenses.--Any
amount paid or distributed out of a home savings account which
is used exclusively to pay qualified housing expenses of any
account beneficiary shall not be includible in gross income.
``(2) Inclusion of amounts not used for qualified housing
expenses.--Any amount paid or distributed out of a home savings
account which is not used exclusively to pay the qualified
housing expenses of the account beneficiary shall be included
in the gross income of such beneficiary.
``(3) Excess contributions returned before due date of
return.--
``(A) In general.--If any excess contribution is
contributed for a taxable year to any home savings
account of an individual, paragraph (2) shall not apply
to distributions from the home savings accounts of such
individual (to the extent such distributions do not
exceed the aggregate excess contributions to all such
accounts of such individual for such year) if--
``(i) such distribution is received by the
individual on or before the last day prescribed
by law (including extensions of time) for
filing such individual's return for such
taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
Any net income described in clause (ii) shall be
included in the gross income of the individual for the
taxable year in which it is received.
``(B) Excess contribution.--For purposes of
subparagraph (A), the term `excess contribution' means
any contribution (other than a rollover contribution
described in paragraph (5)) which is not deductible
under this section.
``(4) Additional tax on distributions not used for
qualified housing expenses.--
``(A) In general.--The tax imposed by this chapter
on the account beneficiary for any taxable year in
which there is a payment or distribution from a home
savings account of such beneficiary which is includible
in gross income under paragraph (2) shall be increased
by 20 percent of the amount which is so includible.
``(B) Exception for disability or death.--
Subparagraph (A) shall not apply if the payment or
distribution is made after the account beneficiary
becomes disabled within the meaning of section 72(m)(7)
or dies.
``(5) Rollover contribution.--An amount is described in
this paragraph as a rollover contribution if it meets the
requirements of subparagraphs (A) and (B).
``(A) In general.--Paragraph (2) shall not apply to
any amount paid or distributed from a home savings
account to the account beneficiary to the extent the
amount received is paid into a home savings account for
the benefit of such beneficiary not later than the 60th
day after the day on which the beneficiary receives the
payment or distribution.
``(B) Limitation.--This paragraph shall not apply
to any amount described in subparagraph (A) received by
an individual from a home savings account if, at any
time during the 1-year period ending on the day of such
receipt, such individual received any other amount
described in subparagraph (A) from a home savings
account which was not includible in the individual's
gross income because of the application of this
paragraph.
``(6) Transfer of account incident to divorce.--The
transfer of an individual's interest in a home savings account
to an individual's spouse or former spouse under a divorce or
separation instrument described in clause (i) of section
121(d)(3)(C) shall not be considered a taxable transfer made by
such individual notwithstanding any other provision of this
subtitle, and such interest shall, after such transfer, be
treated as a home savings account with respect to which such
spouse is the account beneficiary.
``(7) Treatment after death of account beneficiary.--
``(A) Treatment if designated beneficiary is
spouse.--If the account beneficiary's surviving spouse
acquires such beneficiary's interest in a home savings
account by reason of being the designated beneficiary
of such account at the death of the account
beneficiary, such home savings account shall be treated
as if the spouse were the account beneficiary.
``(B) Other cases.--
``(i) In general.--If, by reason of the
death of the account beneficiary, any person
acquires the account beneficiary's interest in
a home savings account in a case to which
subparagraph (A) does not apply--
``(I) such account shall cease to
be a home savings account as of the
date of death, and
``(II) an amount equal to the fair
market value of the assets in such
account on such date shall be
includible, if such person is not the
estate of such beneficiary, in such
person's gross income for the taxable
year which includes such date, or if
such person is the estate of such
beneficiary, in such beneficiary's
gross income for the last taxable year
of such beneficiary.
``(ii) Special rules.--
``(I) Reduction of inclusion for
predeath expenses.--The amount
includible in gross income under clause
(i) by any person (other than the
estate) shall be reduced by the amount
of qualified housing expenses which
were incurred by the decedent before
the date of the decedent's death and
paid by such person within 1 year after
such date.
``(II) Deduction for estate
taxes.--An appropriate deduction shall
be allowed under section 691(c) to any
person (other than the decedent or the
decedent's spouse) with respect to
amounts included in gross income under
clause (i) by such person.
``(f) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after December 31, 2027, each dollar amount in
subsection (b)(1) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
such taxable year begins determined by substituting
`calendar year 2026' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--If any increase under paragraph (1) is not
a multiple of $100, such increase shall be rounded to the
nearest multiple of $100.
``(g) Reports.--The Secretary may require the trustee of a home
savings account to make such reports regarding such account to the
Secretary and to the account beneficiary with respect to contributions,
distributions, the return of excess contributions, and such other
matters as the Secretary determines appropriate. The reports required
by this subsection shall be filed at such time and in such manner and
furnished to such individuals at such time and in such manner as may be
required by the Secretary.''.
(b) Deduction Allowed Whether or Not Individual Itemizes Other
Deductions.--Section 62(a) of such Code is amended by inserting after
paragraph (21) the following new paragraph:
``(22) Home savings accounts.--The deduction allowed by
section 214.''.
(c) Funding Distributions From Individual Retirement Plans.--
Section 408(d) of such Code is amended by adding at the end the
following new paragraph:
``(10) Distributions for home savings account funding.--
``(A) In general.--In the case of an individual who
elects the application of this paragraph for a taxable
year, gross income of the individual for the taxable
year does not include a qualified home savings account
funding distribution to the extent such distribution is
otherwise includible in gross income.
``(B) Qualified home savings account funding
distribution.--For purposes of this paragraph, the term
`qualified home savings account funding distribution'
means a distribution from an individual retirement plan
(other than a plan described in subsection (k) or (p))
of the employee to the extent that such distribution is
contributed to the home savings account of the
individual in a direct trustee-to-trustee transfer.
``(C) Limitations.--
``(i) Maximum dollar amount.--The amount
excluded from gross income by subparagraph (A)
shall not exceed the dollar limitation under
section 214(b)(1) which is applicable at the
time of the qualified home savings account
funding distribution.
``(ii) One-time transfer.--An individual
may make an election under subparagraph (A)
only for one qualified home savings account
funding distribution during the lifetime of the
individual. Such an election, once made, shall
be irrevocable.
``(D) Application of section 72.--Notwithstanding
section 72, in determining the extent to which an
amount is treated as otherwise includible in gross
income for purposes of subparagraph (A), the aggregate
amount distributed from an individual retirement plan
shall be treated as includible in gross income to the
extent that such amount does not exceed the aggregate
amount which would have been so includible if all
amounts from all individual retirement plans were
distributed. Proper adjustments shall be made in
applying section 72 to other distributions in such
taxable year and subsequent taxable years.''.
(d) Tax on Excess Contributions.--Section 4973 of such Code is
amended--
(1) by striking ``or'' at the end of subsection (a)(5), by
inserting ``or'' at the end of subsection (a)(6), and by
inserting after subsection (a)(6) the following new paragraph:
``(7) a home savings account (within the meaning of section
214(c)),'', and
(2) by adding at the end the following new subsection:
``(i) Excess Contributions to Home Savings Accounts.--For purposes
of this section, in the case of home savings accounts (within the
meaning of section 214(c)), the term `excess contributions' means the
sum of--
``(1) the aggregate amount contributed for the taxable year
to the accounts (other than a rollover contribution described
in section 214(e)(5)) which is not allowable as a deduction
under section 214 for such year, and
``(2) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of--
``(A) the distributions out of the accounts which
were included in gross income under section 214(e)(2),
and
``(B) the excess (if any) of--
``(i) the maximum amount allowable as a
deduction under section 214(b)(1) for the
taxable year, over
``(ii) the amount contributed to the
accounts for the taxable year.
For purposes of this subsection, any contribution which
is distributed out of the home savings account in a
distribution to which section 214(e)(3) applies shall
be treated as an amount not contributed.''.
(e) Tax on Prohibited Transactions.--
(1) Section 4975(c) of such Code is amended by adding at
the end the following new paragraph:
``(8) Special rule for home savings accounts.--An
individual for whose benefit a home savings account (within the
meaning of section 214(c)) is established shall be exempt from
the tax imposed by this section with respect to any transaction
concerning such account (which would otherwise be taxable under
this section) if, with respect to such transaction, the account
ceases to be a home savings account by reason of the
application of section 214(d)(2) to such account.''.
(2) Section 4975(e)(1) of such Code is amended by
redesignating subparagraphs (D) through (G) as subparagraphs
(E) through (H), respectively, and by inserting after
subparagraph (C) the following new subparagraph:
``(D) a home savings account described in section
214(c),''.
(f) Failure To Provide Reports on Home Savings Accounts.--Section
6693(a)(2) of such Code is amended by redesignating subparagraphs (B)
through (G) as subparagraphs (C) through (H), respectively, and by
inserting after subparagraph (A) the following new subparagraph:
``(B) section 214(g) (relating to home savings
accounts),''.
(g) Clerical Amendment.--The table of sections for part VII of
subchapter B of chapter 1 of such Code is amended by inserting after
the item relating to section 213 the following new item:
``Sec. 214. Home savings accounts.''.
(h) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
<all>