Bill · H.R. 7422· House(119-HR-7422)
NEST Act
- Introduced
- 2/9/2026
- Last activity
- 2/9/2026 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Kat Cammack
- Cosponsors
- - 1 - 0
- Introduced
- In Committee
What this bill would do
This bill, known as the "NEST Act," proposes to amend the Internal Revenue Code to allow for the creation of first-time homebuyer savings accounts. These accounts are trusts established exclusively to pay for qualified home ownership expenses, such as down payments or closing costs. Individuals can receive a tax deduction for cash contributions made to these accounts. The bill also allows for employer contributions to be excluded from the beneficiary's gross income. These savings accounts are intended to help individuals acquire a primary residence. The provisions are designed to take effect for taxable years beginning after December 31, 2025.
Yes· 3 of 7
Would people in their twenties and thirties be better off under this?+5
The bill targets first-time homebuyers, who are often in the younger adult demographic.
Would middle-income households be better off under this?+5
The bill offers significant tax-advantaged savings opportunities for future homeowners.
Does this cut taxes for middle-income families?+5
The bill allows for tax deductions on contributions to first-time homebuyer savings accounts.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Tax Deductions for Savings: Account beneficiaries are allowed a deduction for the aggregate amount paid in cash to their account during the taxable year (Section 223A(a)). This helps people save more for a home while reducing their taxable income.
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Tax-Exempt Growth: A first-time homebuyer savings account is generally exempt from taxation (Section 223A(c)(1)). This allows the savings to grow without being taxed annually.
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Tax-Free Distributions for Home Purchases: Amounts used exclusively to pay qualified home ownership expenses are not included in the beneficiary's gross income (Section 223A(d)(1)). This ensures that the money saved can be used directly for home costs like down payments or construction without a tax penalty.
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Employer Contribution Benefits: Contributions made by an employer to the account are excluded from the employee's gross income (Section s 139J). Additionally, these contributions are not subject to Social Security, Railroad Retirement, Unemployment, or Withholding taxes (Section 139J and Section 1).
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Adjustable Savings Limits: The "State threshold amount," which limits how much can be contributed, can be adjusted annually by the Secretary to reflect changes in median home prices (Section 223A(e)(1)). This ensures the savings limit stays relevant to the actual cost of housing in different states.
Potential Negative Impacts for People
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Tax Penalties on Misused Funds: If money from the account is used for anything other than qualified home ownership expenses, it must be included in the beneficiary's gross income (Section 223A(d)(2)). Furthermore, there is an additional tax of 20 percent on such amounts (Section 223A(d)(4)(A)).
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Contribution Restrictions: People cannot contribute to these accounts if they had an ownership interest in a principal residence at any time during the three years prior to the contribution (Section 223A(b)(1)(A)(i)). This limits the tool to those who truly meet the "first-time" criteria.
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Strict Account Requirements: To qualify, the account must be a trust managed by a bank or a specific type of authorized person, and assets cannot be invested in life insurance contracts (Section 223A(b)(1)(B) and (C)). This limits how individuals can manage their savings.
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Age Restrictions: An account beneficiary must have attained the age of 18 to establish the account (Section 223A(b)(1)(E)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Middle Class Households+5Good For Young Adults+5Good For Low Income Households+3Good For Urban Residents+2
- Economy And Finance
- Reduces Middle Class Taxes+5Improves Economic Growth+3
- Social Issues And Justice
- Improves Affordable Housing+4
- 2/9/2026
- Referred to the House Committee on Ways and Means.
- 1 Cosponsor added.
- Introduced in House
James MoylanRepublican · Guam