The Home Savings Act allows people to withdraw money from retirement savings accounts—including 401(k)s, IRAs, 403(b) plans, and 457(b) plans—without paying income taxes on those withdrawals, as long as the money is used to pay for a down payment or closing costs on a primary residence. The benefit applies not only to the account owner but also to eligible family members including spouses, children, grandchildren, and parents, allowing workers to help relatives purchase homes. The legislation also exempts these transfers from gift tax rules, preventing families from facing additional tax penalties when sharing down payment assistance. The program is temporary, available only for distributions made through the end of 2030, with the tax breaks taking effect for withdrawals made after December 31, 2025. No specific funding is required since this is a tax provision rather than a spending program.
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