The Invest America Act creates a new type of tax-advantaged savings account called an "Invest America account" that allows individuals to invest in funds tracking the S&P 500 stock index with an annual contribution limit of $5,000 (adjusted for inflation after 2026). The bill primarily affects newborns born after July 4, 2026, to at least one U.S. citizen parent, who will automatically receive a $1,000 federal contribution to their account when established, with the government funding this program through an open-ended appropriation. Account distributions are taxed as long-term capital gains when withdrawn after the account holder reaches age 18, and accounts can be rolled over between providers. The legislation takes effect for tax years beginning after December 31, 2024, creating what amounts to a government-seeded investment account for a new generation of Americans.
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