Bill > S1940

This bill introduces Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) accounts, which are a new type of tax-advantaged savings account designed to help homeowners prepare for and recover from natural disasters or other home-related emergencies. The bill allows individuals to contribute up to $4,500 annually to these accounts, with contributions being tax-deductible and funds growing tax-free. Account holders can use the money for qualified disaster mitigation measures (such as installing impact-resistant windows, strengthening roof connections, or elevating a home) or for disaster recovery costs not covered by insurance. Withdrawals used for these specific purposes are tax-free, while withdrawals used for other purposes are subject to income tax and a 20% additional penalty. The account has several important restrictions, including that it must be managed by a bank, cannot invest in life insurance, and is only for a taxpayer's principal residence. The account can be transferred to a spouse in case of divorce and can be rolled over once within a 1-year period. The bill includes provisions for inflation adjustment of contribution limits and sets up a framework for the Secretary of the Treasury to create detailed regulations governing these accounts.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/1940/all-info