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119-s-1940119th CongressWALLET

READY Accounts Act

Sponsored By: Senator Scott, Rick [R-FL]

Introduced

Summary

Creates tax-deductible READY accounts that help homeowners save and spend tax-free on certified home disaster mitigation and unreimbursed recovery for their principal residence. The bill would let individuals deduct cash contributions up to $4,500 per year and withdraw those funds tax-free for qualified mitigation work or repairs that meet certification rules.

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  • Families and homeowners: Can use account money for certified mitigation measures and for repairing fire, storm, or casualty damage that insurance did not cover. Examples include impact-resistant windows and doors, roof replacement, elevating a home, and strengthening roof-to-wall connections.
  • Savers and taxpayers: Contributions are deductible up to $4,500 annually and the limit is inflation-adjusted beginning after 2026. Nonqualified withdrawals are included in income and generally face a 20% penalty, and excess contributions incur a 6% tax.
  • Banks, trustees, and administrators: READY accounts must be U.S. trusts with a qualified trustee, cannot hold life insurance contracts, allow 60-day rollovers, and include rules for divorce and death transfers.

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Bill Overview

Analyzed Economic Effects

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

Tax break for home disaster savings

If enacted, you would be able to deduct up to $4,500 a year for cash you put into a READY account. After 2026, the $4,500 limit would rise with inflation and be rounded down to the nearest $50. A READY account would be a trust set up in the United States. It must be run by an approved trustee. Contributions must be in cash except for rollovers. Expenses must be for a home you own and use as your main residence. Money taken from the account would be tax-free only if you use it only for approved home disaster mitigation and uninsured recovery. Any amount used for other things would be taxed, and an extra 20% tax would apply to that part.

Rules and penalties for READY accounts

If enacted, you could avoid tax on a READY distribution by rolling it into another READY account for the same person within 60 days, but only one tax-free rollover is allowed each year. If you overcontribute, you could take back the excess plus any earnings before your tax filing deadline; the earnings would be taxable when returned. READY accounts would be added to excise-tax and prohibited-transaction rules, so bad transactions could trigger penalties. Transfers to a spouse under certain divorce instruments would not be taxed, and a surviving spouse named as beneficiary could keep the account. If someone other than the spouse or estate gets the account at death, the account would end and its value could be taxable. The Treasury Secretary could require trustees to file reports. You could not claim a casualty loss deduction for damage amounts you already paid from a READY account.

Sponsors & CoSponsors

Sponsor

Scott, Rick [R-FL]

FL • R

Cosponsors

  • Sen. Schiff, Adam B. [D-CA]

    CA • D

    Sponsored 9/15/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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