H.R. 3407, the Money Accounts for Growth and Advancement Act, creates a new tax-advantaged savings account called MAGA accounts designed to help families build wealth for children under age 8. The bill limits annual contributions to $5,000 in cash (adjusted for inflation after 2026) that must be invested in low-cost U.S. stock index funds, with no withdrawals permitted until the beneficiary turns 18. After age 18, beneficiaries can withdraw up to half their account balance until age 25, with earnings from qualified expenses like college, home purchases, or small business loans taxed as capital gains; all other withdrawals face full taxation plus a 10% penalty for those under 30, and accounts automatically close at age 31. The bill also establishes a pilot program providing a one-time $1,000 tax credit directly deposited into MAGA accounts for eligible children born between 2025 and 2028, with the Treasury Department empowered to automatically open accounts for eligible children unless parents opt out, effective for tax years after December 31, 2024.
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