American Dream Accounts Act of 2026
Sponsored By: Senator Scott, Rick [R-FL]
Introduced
Summary
Creates tax-advantaged accounts for first-time homeownership. This bill would establish tax-exempt trust accounts called American Dream Accounts with strict contribution, distribution, rollover, and reporting rules to promote first-time homeownership and limit misuse.
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- Families and first-time homebuyers: Eligible U.S. citizens could save in ADAs and take tax-free qualified first-time homebuyer distributions up to $500,000, subject to a 3-year ownership requirement that can trigger income inclusion if broken.
- Savers: Contributions would be cash-only and generally capped at $7,500 per year with a $10,000 catch-up for people age 35 or older.
- Trustees and tax administration: ADAs must be held by banks or Secretary-approved trustees, would be subject to unrelated business income tax rules, and would face new reporting, excess-contribution, and penalty rules. The rules apply for taxable years beginning after December 31, 2026.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 0 costs, 1 mixed.
New tax‑preferred accounts for homebuyers
If enacted, the bill would create American Dream Accounts (ADAs) for U.S. citizens to save for a first principal residence. ADAs would have to be U.S. trusts with a qualifying trustee, accept cash only, and require a yearly attestation about other ADAs you hold. You would be able to contribute up to $7,500 a year (or $10,000 if you are age 35 before year-end), but your yearly allowance would be reduced by a $250,000 aggregate contribution limit across your ADAs. Withdrawals used for a first home would be excluded from income up to $500,000 (or $250,000 for certain joint purchases), and you could only get that exclusion once in your lifetime. If you sell the home within three years, the excluded amount would generally be taxed when you sell unless a listed exception applies (for example, death, disability, divorce, change in dependents, or a covered job relocation). Nonqualified withdrawals would be taxed as income and generally subject to a 10% additional tax. The bill would also allow 60-day rollovers to other ADAs for family members or to Roth IRAs under Roth rules, and it would add trustee reporting, prohibited-transaction, excess-contribution, and penalty rules. These rules would apply to taxable years beginning after December 31, 2026.
Sponsors & CoSponsors
Sponsor
Scott, Rick [R-FL]
FL • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov