Home Savings Account Proposed in House

Representative Scott Perry (R-PA) has introduced H.R. 9480, to encourage savings for home purchases. The bill would create a new federal income tax framework for “home savings accounts” by adding Internal Revenue Code Section (IRC Sec.) 214 and related provisions. It allows an income tax deduction for individuals equal to cash contributions paid during the taxable year to a home savings account. The deduction is limited to $10,000 per year ($20,000 for married taxpayers filing jointly) and is denied to any taxpayer for whom another taxpayer can claim a deduction under IRC Sec. 151. The home savings account would be created exclusively to pay for the purchase of a principal residence or to pay down on a mortgage.