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119-s-1718119th CongressWALLET

Invest America Act

Sponsored By: Senator Cruz, Ted [R-TX]

Introduced

Summary

Creates a new class of Invest America Accounts aimed at encouraging long-term household saving. The bill would set up tax-advantaged trusts that invest only in qualifying S&P 500 index funds and would seed eligible newborns with a $1,000 federal contribution.

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  • Families and children: Newborns born after July 4, 2026 with at least one U.S. citizen parent would be eligible for an automatic IAA and a $1,000 federal deposit. Certification and automatic account setup rules would be completed within six months of birth.
  • Savers and households: Individuals could put up to $5,000 a year into an IAA, with cost-of-living adjustments starting after 2026. Distributions before age 18 would generally be restricted and taxable as capital gain when withdrawn.
  • Financial institutions and trustees: Trustees must be banks or eligible fiduciaries, keep assets separate, limit investments to qualifying mutual funds or ETFs, and file reports to the Treasury and beneficiaries.
  • Federal role: The Treasury would build procedures for certification, choose low-fee account providers, and an appropriation would fund federal seed payments.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 0 costs, 2 mixed.

New $1,000 baby deposit and limits

If enacted, the Treasury would deposit $1,000 into an Invest America Account for each eligible baby born after July 4, 2026. That federal $1,000 would not count as taxable income. Annual cash contributions to IAAs would be limited to $5,000 (with cost‑of‑living increases starting after 2026 and rounding rules). IAAs would accept only cash contributions except for qualified rollovers, which include the federal deposit and trustee-to-trustee transfers.

New Invest America trust accounts

If enacted, the bill would create a new tax-favored trust called an Invest America Account (IAA). IAAs would be exempt from normal income tax rules but still face tax on unrelated business income. Trustees would need to be banks or approved managers and keep assets separate. IAAs could only hold mutual funds or ETFs that track the S&P 500, and trustees must send reports to the government and beneficiaries.

Rules for withdrawals and excess deposits

If enacted, IAAs generally could not pay out money before the beneficiary turns 18, except for qualified rollovers. Money taken from an IAA would be included in income but the bill would treat those IAA distributions as net capital gain for tax character. The bill would also add a penalty regime for excess contributions and a carryover formula to compute excess amounts under existing tax penalty rules.

Sponsors & CoSponsors

Sponsor

Cruz, Ted [R-TX]

TX • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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