American Dream Accounts Act of 2026

Key Points

• This bill creates "American Dream Accounts" — special tax-free savings trusts for U.S. citizens to save for their first home. The accounts work similarly to retirement savings accounts, where money grows tax-free as long as it's used for a qualifying home purchase.
• Annual contributions are capped at $7,500, but people age 35 and older can contribute up to $10,000 per year as a "catch-up" contribution. The total lifetime contribution limit across all accounts is $250,000.
• First-time homebuyers can withdraw up to $500,000 tax-free to purchase a home. If two people buy a home together and both use their accounts, each is limited to $250,000.
• If the home is sold within 3 years, the tax-free benefit is clawed back — the homeowner must pay income tax on the withdrawn amount. Exceptions exist for major life events like death, divorce, job loss, or a military-related move of 50+ miles.
• Money not used for a home can be rolled over into a Roth IRA or transferred to a family member's account, up to a $100,000 lifetime limit. Non-qualifying withdrawals face a 10% penalty plus regular income taxes.
• Only U.S. citizens are eligible to open these accounts. The program would take effect for tax years beginning after December 31, 2026.

Votes

No votes have been recorded for this legislation yet.

Related Bills

No related bills have been identified yet.