H.R. 9480 creates a new tax-advantaged savings account designed to help Americans save for housing costs. Under the bill, individuals can deduct up to $10,000 annually in contributions to home savings accounts ($20,000 for married couples filing jointly), with funds used exclusively for qualified housing expenses such as purchasing a primary home or paying down a mortgage. Distributions used for these approved purposes are tax-free, while non-qualified withdrawals are subject to income tax plus a 20% penalty, with exceptions for disability or death. The legislation also allows people to make a one-time, tax-free transfer from traditional retirement accounts into home savings accounts, subject to the same annual contribution limits. The tax deduction becomes effective for the 2027 tax year and beyond, with accounts held at banks, insurance companies, or approved custodians and subject to IRS reporting requirements.
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