The American Dream Accounts Act of 2026 creates a new tax-advantaged savings account designed to help Americans save for their first home purchase. Account holders can contribute up to $7,500 annually (or $10,000 for those age 35 and older) with a lifetime contribution cap of $250,000, and they can withdraw up to $500,000 tax-free for qualified first-time homebuyer expenses if the home is held for at least three years. Funds can be rolled over to family members' accounts or Roth IRAs, and the accounts are subject to standard tax compliance rules similar to retirement accounts, including penalties for excess contributions and required IRS reporting. The bill takes effect for tax years beginning on or after January 1, 2027.
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