I 
119TH CONGRESS 
2D SESSION 
H. R. 7185 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
certain retirement plan distributions used for a down payment or closing 
costs for a principal residence, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 21, 2026 
Mr. MCGUIRE introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to exclude 
from gross income certain retirement plan distributions 
used for a down payment or closing costs for a principal 
residence, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Home Savings Act’’. 
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SEC. 2. EXCLUSION FROM GROSS INCOME OF RETIREMENT 
PLAN DISTRIBUTIONS USED FOR A DOWN 
PAYMENT OR CLOSING COSTS FOR A PRIN-
CIPAL RESIDENCE. 
(a) IN GENERAL.— 
(1) DEFINED CONTRIBUTION PLANS.—Section 
402 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new sub-
section: 
‘‘(m) DISTRIBUTIONS FOR A DOWN PAYMENT OR 
CLOSING COSTS FOR A PRINCIPAL RESIDENCE.— 
‘‘(1) IN
GENERAL.—The gross income of an 
employee for any taxable year shall not include any 
distribution from a defined contribution plan of such 
employee to the extent that such distribution is used 
for a down payment or closing costs associated with 
acquiring a principal residence of— 
‘‘(A) the employee, or 
‘‘(B) an eligible relative of the employee. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) ELIGIBLE RELATIVE.—The term ‘eli-
gible relative’ means, with respect to any em-
ployee— 
‘‘(i) the spouse of the employee, or 
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‘‘(ii) any child, grandchild, or ancestor 
of— 
‘‘(I) the employee, or 
‘‘(II) the spouse of the employee. 
‘‘(B) DEFINED
CONTRIBUTION
PLAN.— 
The term ‘defined contribution plan’ has the 
meaning given the term in section 414(i). 
‘‘(C) PRINCIPAL
RESIDENCE.—The term 
‘principal residence’ has the same meaning as 
when used in section 121. 
‘‘(3) APPLICATION OF SECTION 72.—Rules simi-
lar to the rules of section 408(d)(10)(C) shall apply 
for purposes of this subsection, by taking into ac-
count all amounts in the defined contribution plan to 
which the employee has nonforfeitable right in lieu 
of all amounts in all individual retirement plans of 
the individual. 
‘‘(4) GIFT TAX TREATMENT.—So much of any 
transfer of a distribution described in paragraph (1) 
by the employee to an eligible relative as is used by 
such eligible relative for a down payment or closing 
costs associated with acquiring a principal residence 
of such eligible relative shall not be treated as a gift 
for purposes of section 2503(a). 
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‘‘(5) TERMINATION DATE.—Paragraph (1) shall 
not apply to distributions made in taxable years be-
ginning after December 31, 2030.’’. 
(2) CERTAIN ANNUITY PLANS.—Section 403 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) DISTRIBUTIONS
FOR
A DOWN PAYMENT
OR 
CLOSING COSTS FOR A PRINCIPAL RESIDENCE.— 
‘‘(1) IN
GENERAL.—The rules of section 
402(m) shall apply to distributions under an annuity 
plan described in subsection (a) or an annuity con-
tract described in subsection (b). 
‘‘(2) TERMINATION DATE.—Paragraph (1) shall 
not apply to distributions made in taxable years be-
ginning after December 31, 2030.’’. 
(3) INDIVIDUAL RETIREMENT PLANS.—Section 
408(d) of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(10) DISTRIBUTIONS FOR A DOWN PAYMENT 
OR CLOSING COSTS FOR A PRINCIPAL RESIDENCE.— 
‘‘(A) IN GENERAL.—The gross income of 
an individual for any taxable year shall not in-
clude any distribution from an individual retire-
ment plan of such individual to the extent that 
such distribution is used for a down payment or 
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‘‘(C) APPLICATION OF SECTION 72.—Not-
withstanding section 72, in determining the ex-
tent to which a distribution is used for a down 
payment or closing costs pursuant to subpara-
graph (A), the entire amount of the distribution 
shall be treated as includible in gross income 
without regard to such subparagraph to the ex-
tent that such amount does not exceed the ag-
gregate amount which would have been so in-
cludible if all amounts in all individual retire-
ment plans of the individual were distributed 
during such taxable year and all such plans 
were treated as 1 contract for purposes of de-
termining under section 72 the aggregate 
amount which would have been so includible. 
Proper adjustments shall be made in applying 
section 72 to other distributions in such taxable 
year and subsequent taxable years. 
‘‘(D) GIFT TAX TREATMENT.—So much of 
any transfer of a distribution described in sub-
paragraph (A) by the individual to an eligible 
relative as is used by such eligible relative for 
a down payment or closing costs associated with 
acquiring a principal residence of such eligible 
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relative shall not be treated as a gift for pur-
poses of section 2503(a). 
‘‘(E) TERMINATION DATE.—Subparagraph 
(A) shall not apply to distributions made in tax-
able years beginning after December 31, 
2030.’’. 
(4) 457(b) PLANS.—Section 457(e) of such 
Code is amended by adding at the end the following 
new paragraph: 
‘‘(19) DISTRIBUTIONS FOR A DOWN PAYMENT 
OR CLOSING COSTS FOR A PRINCIPAL RESIDENCE.— 
‘‘(A) IN GENERAL.—The rules of section 
402(m) shall apply to distributions under an el-
igible deferred compensation plan established 
and maintained by an employer described in 
paragraph (1)(A). 
‘‘(B) TERMINATION DATE.—Subparagraph 
(A) shall not apply to distributions made in tax-
able years beginning after December 31, 
2030.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made in taxable 
years beginning after December 31, 2025. 
Æ 
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