NEST Act
Summary
What This Bill Does
The bill adds Internal Revenue Code section 223A for first-time homebuyer savings accounts. Account beneficiaries at least age 18 may deduct cash contributions made by or for them, subject to annual and lifetime limits tied to a state threshold amount equal to 20 percent of the state median home sale price. Account assets must be held in a U.S. trust administered by a bank or approved trustee, used for qualified home ownership expenses such as down payments, financing, closing costs, acquisition, construction, or reconstruction of a primary residence, and not commingled or invested in life insurance. Qualified withdrawals are tax-free; nonqualified withdrawals are income and generally face a 20 percent additional tax. Treasury, after consulting HUD, must update state thresholds after 2025 only upward. Trustees must report contributions and distributions. A new section 139J excludes employer contributions to an employee's first-time homebuyer savings account from gross income.
Who Benefits and How
First-time homebuyers benefit from a federal deduction for account contributions, tax-free qualified withdrawals, rollover treatment, and employer contributions excluded from income. Employers gain a tax-favored benefit they can provide to workers saving for a first home. Banks and approved trustees gain a new account product, while housing-market participants may benefit if more households can assemble down payments and closing costs.
Who Bears the Burden and How
Treasury and IRS must administer a new account regime, reporting rules, state median-price thresholds, excess-contribution treatment, rollover rules, and penalties. Account trustees must report account contributions, distributions, earnings, and rollovers to IRS and beneficiaries. Taxpayers who make nonqualified withdrawals must include them in income and usually pay a 20 percent additional tax.
Key Provisions
- Creates deductible first-time homebuyer savings account contributions for eligible account beneficiaries at least age 18.
- Limits lifetime account contributions by a state threshold amount equal to 20 percent of the state median home sale price and bars contributions by people who owned a principal residence in the prior three years.
- Excludes qualified withdrawals for down payments, financing, closing costs, acquisition, construction, or reconstruction of a primary residence from gross income.
- Imposes income inclusion and a 20 percent additional tax on nonqualified withdrawals, with exceptions such as death and limited rollover treatment.
- Excludes employer contributions to a first-time homebuyer savings account from employee gross income and requires trustee reporting to IRS and beneficiaries.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Creates a federal first-time homebuyer savings account tax structure with deductions for cash contributions, tax-free qualified home-purchase withdrawals, employer contribution exclusions, trustee reporting, state-based account limits, and a 20 percent additional tax on nonqualified withdrawals.
Key Policy Areas
Tax, Housing, Financial Services
Primary Purpose
Creates a federal first-time homebuyer savings account tax structure with deductions for cash contributions, tax-free qualified home-purchase withdrawals, employer contribution exclusions, trustee reporting, state-based account limits, and a 20 percent additional tax on nonqualified withdrawals.
Policy Domains
Substantive provisions
Identified Gains
- First-time homebuyers
- Employees receiving homebuyer account contributions
- Employers offering housing savings benefits
- Banks administering homebuyer accounts
Identified Costs
- Internal Revenue Service
- Treasury Department
- Homebuyer account trustees
- Taxpayers making nonqualified withdrawals
Sponsors
Legislative Progress
In CommitteeReferred to the House Committee on Ways and Means.
Introduced in House
Mrs. Cammack (for herself and Mr. Moylan) introduced the following …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Employers offering housing savings benefits
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "hud_secretary"
- → Secretary of Housing and Urban Development
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
Costs to acquire, construct, or reconstruct a primary residence, including down payments, financing, and closing costs, for a first-time homebuyer.
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology