American Dream Accounts Act of 2026
Sponsored By: Representative Bean, Aaron [R-FL-4]
Introduced
Summary
American dream accounts would create a new federal, tax-advantaged savings trust designed to help U.S. citizens save for a first home and related transfers while allowing certain rollovers to Roth IRAs and family accounts.
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- Families and first-time homebuyers: Qualified first-time homebuyer withdrawals would be tax-exempt up to a $500,000 lifetime limit, with different effective caps when two people use accounts for a joint purchase.
- Savers and households: Contributions must be cash and are limited each year to the lesser of $7,500 or the amount remaining under a $250,000 lifetime contribution cap, with a $10,000 catch-up for those aged 35 or older.
- Trustees, estates, and tax administration: Trustees must be banks or qualified administrators and must report contributions and distributions. Nonqualified distributions face a 10% additional tax, excess contributions and prohibited transactions get new penalty rules, and limited rollovers to other accounts or Roth IRAs are allowed under timing and lifetime limits including a $100,000 cap on certain rollover-triggering distributions.
The rules would apply to taxable years beginning after December 31, 2026.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 2 benefits, 0 costs, 2 mixed.
Contribution limits for homebuyer savings
If enacted, annual contributions per beneficiary would be the lesser of $7,500 (or $10,000 if you are 35 or older) and the remaining amount up to a $250,000 lifetime cap. Contributions must be cash. Regular contributions would stop after you take a qualified first-time homebuyer distribution, though some rollovers would be treated differently. The accounts would be subject to excess-contribution rules and penalties under the tax code.
Tax-free homebuyer withdrawals and penalties
If enacted, distributions from an American dream account would be taxable unless they are qualified first-time homebuyer distributions. You could exclude up to $500,000 of such a distribution (or $250,000 in some joint purchases). Only one qualified first-time homebuyer distribution from these accounts is allowed in a lifetime. If you sell the home within 3 years, excluded amounts could be taxed again unless a listed exception applies. Taxable nonqualified distributions would face an extra 10% penalty, with exceptions for death or disability.
Rollovers to family accounts and Roth IRAs
If enacted, you could roll distributions from an American dream account into another such account for the same person, into a family member's account, or into a Roth IRA. Rollovers generally must occur within 60 days, and same-beneficiary rollovers are limited to once per 12 months. Transfers to other beneficiaries and to Roth IRAs must be trustee-to-trustee and follow annual and lifetime dollar rules, including a $100,000 lifetime cap on certain transfers. A beneficiary change at death to a family member would not count as a taxable distribution, subject to dollar limits.
New American Dream account rules
If enacted, this bill would create "American dream accounts" for U.S. citizens and set rules for trustees. Trustees generally must be banks or show they can manage accounts, and custodians can be treated as trustees. Accounts could not buy life insurance, must keep beneficiaries' interests nonforfeitable, and may commingle only in common funds. Trustees would have to report contributions and distributions to the IRS and beneficiaries, and prohibited-transaction rules would apply. These rules would start for tax years after Dec 31, 2026.
Sponsors & CoSponsors
Sponsor
Bean, Aaron [R-FL-4]
FL • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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