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119-hr-7422119th CongressWALLET

NEST Act

Sponsored By: Representative Cammack, Kat [R-FL-3]

Introduced

Summary

A tax-advantaged savings account for first-time homebuyers. This bill creates First-Time Homebuyer Savings Accounts that let eligible people deduct contributions, save investment gains tax-free for qualified home purchase costs, and set contribution caps tied to state home prices.

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  • Families and first-time buyers: Contributions to an account are deductible and qualified distributions for home ownership costs are excluded from income. Accounts require no prior principal residence ownership in the past 3 years and contributions are limited by a state threshold equal to 20 percent of the state median home sale price.
  • Employers and workers: Employer contributions to these accounts are excluded from employees' gross income and from employment taxes and must be reported on W-2 forms.
  • Tax administration and compliance: Trustees must report annually to the IRS and beneficiaries, and the bill adds new excise and prohibited-transaction rules. Excess contributions face a new excise tax and nonqualified withdrawals are taxed and subject to a 20 percent additional tax, and the rules apply to taxable years beginning after December 31, 2025.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 1 benefits, 1 costs, 2 mixed.

New tax-free homebuyer savings account

If enacted, the bill would create a new First-Time Homebuyer Savings Account (FTHSA) held as a U.S. trust. You would be able to deduct cash you put into your FTHSA (an above-the-line deduction) subject to yearly and lifetime limits. Lifetime contributions would be capped at 20% of your State's median home sale price, and Treasury would update that cap after 2025 but could not lower it. The account would be tax-exempt while it stays a qualified FTHSA, and qualified home costs would include down payments, financing, and closing costs. If you acquire an ownership interest in a principal residence, the account would cease at the close of the 60-day period after that acquisition and the balance would be treated as distributed. These rules would apply for tax years beginning after December 31, 2025.

Employer contributions to homebuyer accounts

If enacted, employer amounts contributed to an employee's FTHSA would not be included in the employee's gross income. Those employer contributions would also be excluded from wages for Social Security, Railroad Retirement, and unemployment tax bases when it is reasonable to expect the contribution will be excludable. Employers would need to show FTHSA contributions on each employee's Form W-2. These rules would apply for tax years beginning after December 31, 2025.

Penalties for wrong homebuyer withdrawals

If enacted, any FTHSA distribution not used only for qualified home costs would be taxable to the beneficiary. You would also owe an extra tax equal to 20 percent of the includible non‑qualified amount, except for distributions after the beneficiary's death. The bill would treat excess contributions as subject to excise rules and allow corrective distributions (with net income included in income) if fixed by the return due date. Certain prohibited transactions could be treated as distributions and not counted as qualified expenses, and you could not claim another tax break for the same home costs already counted under the FTHSA. These rules would apply for tax years beginning after December 31, 2025.

Reporting, rollovers, and account rules

If enacted, trustees must report FTHSA contributions, distributions, and other details to the IRS and to account beneficiaries. You would be able to roll over FTHSA distributions to another FTHSA tax‑favored if you redeposit within 60 days, but only once in any 1‑year period. The bill would apply special rules for death and divorce similar to existing tax-advantaged accounts. Trustees or other filers who fail to send required FTHSA reports could face penalties under the tax code. These rules would apply for tax years beginning after December 31, 2025.

Sponsors & CoSponsors

Sponsor

Cammack, Kat [R-FL-3]

FL • R

Cosponsors

  • Del. Moylan, James C. [R-GU-At Large]

    GU • R

    Sponsored 2/9/2026

Roll Call Votes

No roll call votes available for this bill.

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