I 
119TH CONGRESS 
2D SESSION 
H. R. 7422 
To amend the Internal Revenue Code of 1986 to allow the establishment 
of first-time homebuyer savings accounts. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 9, 2026 
Mrs. CAMMACK (for herself and Mr. MOYLAN) 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 allow the 
establishment of first-time homebuyer savings accounts. 
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 ‘‘Next-Generation Eq-
uity Savings Tool Act’’ or the ‘‘NEST Act’’. 
SEC. 2. FIRST-TIME HOMEBUYER SAVINGS ACCOUNT. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 223 the following new section: 
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‘‘SEC. 223A. FIRST-TIME HOMEBUYER SAVINGS ACCOUNT. 
‘‘(a) DEDUCTION ALLOWED.—In the case of an ac-
count beneficiary, there shall be allowed as a deduction 
for the taxable year an amount equal to the aggregate 
amount paid in cash during such taxable year by or on 
behalf of such individual to a first-time homebuyer savings 
account of such individual. 
‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) FIRST-TIME
HOMEBUYER
SAVINGS
AC-
COUNT.—The term ‘first-time homebuyer savings ac-
count’ means a trust created or organized in the 
United States exclusively for the purpose of paying 
the qualified home ownership expenses of the ac-
count beneficiary (and designated as a first-time 
homebuyer savings account at the time created or 
organized), but only if the written governing instru-
ment creating the trust meets the following require-
ments: 
‘‘(A) No contribution will be accepted— 
‘‘(i) if the account beneficiary had an 
ownership interest in a principal residence 
at any time during the 3-year period end-
ing on the date of the contribution, 
‘‘(ii) if such contribution would result 
in lifetime aggregate contributions to the 
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account exceeding the State threshold 
amount, 
‘‘(iii) unless it is in cash, or 
‘‘(iv) except in the case of rollover 
contributions, if such contribution would 
result in aggregate contributions to the ac-
count for the taxable year exceeding the 
amount 
in 
effect 
under 
subsection 
(b)(1)(B). 
‘‘(B) The trustee is a bank (as defined in 
section 408(n)) or another person who dem-
onstrates to the satisfaction of the Secretary 
that the manner in which that person will ad-
minister the trust will be consistent with the re-
quirements of this section. 
‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts. 
‘‘(D) The assets of the trust shall not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
‘‘(E) The account beneficiary has attained 
the age of 18. 
‘‘(2) STATE THRESHOLD AMOUNT.—The term 
‘State threshold amount’ means 20 percent of the 
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median home sale price in the State in which such 
account is established. 
‘‘(3) 
QUALIFIED
HOME
OWNERSHIP
EX-
PENSES.—The term ‘qualified home ownership ex-
penses’ means costs to acquire, construct, or recon-
struct a residence, including a down payment, fi-
nancing, or other closing costs relating to the pur-
chase, if such residence is the primary residence of 
the account beneficiary of a first-time homebuyer 
savings account and such account beneficiary is a 
first-time homebuyer (as defined in section 36(c)) 
with respect to such purchase. 
‘‘(4) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the first-time homebuyer savings account is es-
tablished. 
‘‘(5) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
‘‘(A) Section 219(d)(2) (relating to no de-
duction for rollovers). 
‘‘(B) Section 219(f)(3) (relating to time 
when contributions deemed made). 
‘‘(C) Section 219(f)(5) (relating to em-
ployer payments). 
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‘‘(D) Section 408(g) (relating to commu-
nity property laws). 
‘‘(c) TAX TREATMENT OF ACCOUNTS.— 
‘‘(1) IN
GENERAL.—A first-time homebuyer 
savings account is exempt from taxation under this 
subtitle unless such account has ceased to be a first- 
time homebuyer savings account. Notwithstanding 
the preceding sentence, any such account is subject 
to the taxes imposed by section 511 (relating to im-
position of tax on unrelated business income of char-
itable, etc. organizations). 
‘‘(2) ACCOUNT TERMINATIONS.— 
‘‘(A) ACQUISITION
OF
PRINCIPAL
RESI-
DENCE.—If the account beneficiary acquires an 
ownership interest in a principal residence— 
‘‘(i) each first-time homebuyer savings 
account of such beneficiary shall cease to 
be a first-time homebuyer savings account 
as of the close of the 60-day period begin-
ning on the date of such acquisition, and 
‘‘(ii) the balance of such account as of 
such date shall be treated as distributed to 
such beneficiary. 
‘‘(B) PROHIBITED TRANSACTIONS, ETC.— 
Rules similar to the rules of paragraphs (2) and 
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(4) of section 408(e) shall apply to any first- 
time homebuyer savings account, and any 
amounts treated as distributed under such rules 
shall be treated as not used to pay qualified 
home ownership expenses. 
‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) AMOUNTS
USED
FOR
QUALIFIED
HOME 
OWNERSHIP EXPENSES.—Any amount paid or dis-
tributed out of a first-time homebuyer savings ac-
count which is used exclusively to pay qualified home 
ownership expenses of any account beneficiary shall 
not be includible in gross income. 
‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR 
QUALIFIED
HOME
OWNERSHIP
EXPENSES.—Any 
amount paid or distributed out of a first-time home-
buyer savings account which is not used exclusively 
to pay the qualified home ownership expenses of the 
account beneficiary shall be included in the gross in-
come of such beneficiary. 
‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE-
FORE DUE DATE OF RETURN.— 
‘‘(A) IN
GENERAL.—If any excess con-
tribution is contributed for a taxable year to 
any first-time homebuyer savings account of an 
individual, paragraph (2) shall not apply to dis-
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tributions from the first-time homebuyer sav-
ings accounts of such individual (to the extent 
such distributions do not exceed the aggregate 
excess contributions to all such accounts of 
such individual for such year) if— 
‘‘(i) such distribution is received by 
the individual on or before the last day 
prescribed by law (including extensions of 
time) for filing such individual’s return for 
such taxable year, and 
‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such excess contribution. 
Any net income described in clause (ii) shall be 
included in the gross income of the individual 
for the taxable year in which it is received. 
‘‘(B) EXCESS
CONTRIBUTION.—For pur-
poses of subparagraph (A), the term ‘excess 
contribution’ means any contribution (other 
than a rollover contribution described in para-
graph (5)) which is neither excludable from 
gross income under section 139J nor deductible 
under this section. 
‘‘(4) ADDITIONAL TAX FOR DISTRIBUTIONS NOT 
USED FOR HOME OWNERSHIP EXPENSES.— 
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‘‘(B) LIMITATION.—This paragraph shall 
not apply to any amount described in subpara-
graph (A) received by an individual from a 
first-time homebuyer savings account if, at any 
time during the 1-year period ending on the day 
of such receipt, such individual received any 
other amount described in subparagraph (A) 
from a first-time homebuyer savings account 
which was not includible in the individual’s 
gross income because of the application of this 
paragraph. 
‘‘(6) SPECIAL
RULES
FOR
DEATH
AND
DI-
VORCE.—Rules similar to the rules of paragraphs 
(7) and (8) of section 223(f) shall apply for pur-
poses of this section. 
‘‘(7) DISALLOWANCE OF EXCLUDED AMOUNTS 
AS DEDUCTION, CREDIT, OR EXCLUSION.—No deduc-
tion, credit, or exclusion shall be allowed to the tax-
payer under any other section of this chapter for any 
qualified home ownership expenses to the extent 
taken into account in determining the amount of the 
exclusion under paragraph (1). 
‘‘(e) CONTRIBUTION LIMIT ADJUSTMENT.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), in the case of any taxable year beginning 
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after 2025, the Secretary, after consultation with 
the Secretary of Housing and Urban Development, 
shall adjust the State threshold amount for each 
State to reflect the median home price in each such 
State using the most recent data available to the 
Secretary. 
‘‘(2) LIMIT MAY NOT BE LOWERED.—The ad-
justment described in paragraph (1) may only be 
used to increase the State threshold amount for a 
State. 
‘‘(f) REPORTS.— 
‘‘(1) IN GENERAL.—The trustee of a first-time 
homebuyer savings account shall make such reports 
regarding such account to the Secretary and to the 
account beneficiary with respect to contributions, 
distributions, and such other matters as the Sec-
retary may require. The reports required by this 
subsection shall be filed at such time and in such 
manner and furnished to such individuals at such 
time and in such manner as may be required. 
‘‘(2) ROLLOVER DISTRIBUTIONS.—In the case 
of any distribution described in subsection (e)(5), 
the officer or employee having control of the first- 
time homebuyer savings account (or their designee) 
shall provide a report to the trustee of the first-time 
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homebuyer savings account to which the distribution 
is made. Such report shall be filed at such time and 
in such manner as the Secretary may require and 
shall include information with respect to the con-
tributions, distributions, and earnings of the first- 
time homebuyer savings account as of the date of 
the distribution described in such subsection, to-
gether with such other matters as the Secretary may 
require.’’. 
(b) DEDUCTION ALLOWED ABOVE THE LINE.—Sec-
tion 62(a) of such Code is amended by inserting after 
paragraph (21) the following new paragraph: 
‘‘(22) FIRST-TIME
HOMEBUYER
SAVINGS
AC-
COUNTS.—The deduction allowed by section 223A.’’. 
(c) EXCLUSIONS FOR EMPLOYER CONTRIBUTIONS TO 
FIRST-TIME HOMEBUYER SAVINGS ACCOUNTS.— 
(1) EXCLUSION FROM INCOME TAX.— 
(A) IN GENERAL.—Part III of subchapter 
B of chapter 1 of such Code is amended by in-
serting after section 139I the following new sec-
tion: 
‘‘SEC. 139J. FIRST-TIME HOMEBUYER SAVINGS ACCOUNT 
CONTRIBUTIONS. 
‘‘In the case of an account beneficiary (as defined in 
section 223A(c)(3)), gross income does not include 
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amounts contributed by such account beneficiary’s em-
ployer to any first-time homebuyer savings account (as de-
fined in section 223A(c)(1)) of such account beneficiary.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for part III of subchapter B of chapter 
1 of such Code is amended by inserting after 
the item relating to section 139I the following 
new item: 
‘‘Sec. 139J. First-time homebuyer savings account contributions.’’. 
(2) EXCLUSION FROM EMPLOYMENT TAXES.— 
(A) SOCIAL SECURITY TAXES.— 
(i) IN GENERAL.—Section 3121(a) is 
amended by striking ‘‘or’’ at the end of 
paragraph (22)(B), by striking the period 
at the end of paragraph (23) and inserting 
‘‘, or’’, and by inserting after paragraph 
(23) the following new paragraph: 
‘‘(24) any payment made to or for the benefit 
of an employee if at the time of such payment it is 
reasonable to believe that the employee will be able 
to exclude such payment from income under section 
139J.’’. 
(ii) CONFORMING AMENDMENT TO SO-
CIAL
SECURITY
ACT.—Section 209(a) of 
the Social Security Act is amended by 
striking ‘‘or’’ at the end of paragraph (19), 
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by striking ‘‘).’’ at the end of paragraph 
(20) and inserting ‘‘; or’’, and by inserting 
after paragraph (20) the following new 
paragraph: 
‘‘(21) any reimbursement which is excludable 
from gross income under section 139J of the Inter-
nal Revenue Code of 1986.’’. 
(B) RAILROAD RETIREMENT TAX.—Section 
3231(e) of such Code is amended by adding at 
the end the following new paragraph: 
‘‘(13) FIRST-TIME
HOMEBUYER
SAVINGS
AC-
COUNT CONTRIBUTIONS.—The term ‘compensation’ 
shall not include any payment made to or for the 
benefit of an employee if at the time of such pay-
ment it is reasonable to believe that the employee 
will be able to exclude such payment from income 
under section 139J.’’. 
(C) 
UNEMPLOYMENT
TAX.—Section 
3306(b) of such Code is amended by striking 
‘‘or’’ at the end of paragraph (19)(B), by strik-
ing the period at the end of paragraph (20) and 
inserting ‘‘; or’’, and by inserting after para-
graph (20) the following new paragraph: 
‘‘(21) any payment made to or for the benefit 
of an employee if at the time of such payment it is 
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reasonable to believe that the employee will be able 
to exclude such payment from income under section 
139J.’’. 
(D) WITHHOLDING TAX.—Section 3401(a) 
of such Code is amended by striking ‘‘or’’ at 
the end of paragraph (22), by striking the pe-
riod at the end of paragraph (23) and inserting 
‘‘; or’’, and by inserting after paragraph (23) 
the following new paragraph: 
‘‘(24) any payment made to or for the benefit 
of an employee if at the time of such payment it is 
reasonable to believe that the employee will be able 
to exclude such payment from income under section 
139J.’’. 
(3) EMPLOYER CONTRIBUTIONS REQUIRED TO 
BE SHOWN ON W–2.—Section 6051(a) of such Code 
is amended by striking ‘‘and’’ at the end of para-
graph (16), by striking the period at the end of 
paragraph (17) and inserting ‘‘, and’’, and by insert-
ing after paragraph (17) the following new para-
graph: 
‘‘(18) the amount contributed to any first-time 
homebuyer savings account (as defined in section 
223A(c)(1)) of such employee.’’. 
(d) TAX ON EXCESS CONTRIBUTIONS.— 
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(1) IN
GENERAL.—Section 4973(a) of such 
Code is amended by striking ‘‘or’’ at the end of 
paragraph (5), by inserting ‘‘or’’ at the end of para-
graph (6), and by inserting after paragraph (6) the 
following new paragraph: 
‘‘(7) a first-time homebuyer savings account 
(within the meaning of section 223A).’’. 
(2) EXCESS CONTRIBUTION.—Section 4973 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(i) EXCESS CONTRIBUTIONS TO FIRST-TIME HOME-
BUYER SAVINGS ACCOUNT.—For purposes of this section, 
in the case of first-time homebuyer savings accounts (as 
defined in section 223A), the term ‘excess contributions’ 
means the sum of— 
‘‘(1) the aggregate amount contributed for the 
taxable year to first-time homebuyer savings ac-
counts (other than a rollover contribution contrib-
uted under section 223A(e)(4) or (6)) which is nei-
ther excludable from gross income under section 
139J nor allowable as a deduction under section 
223A for such year, plus 
‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by 
the sum of— 
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‘‘(A) the distribution out of the first-time 
homebuyer savings accounts which were in-
cluded 
in 
gross 
income 
under 
section 
223A(e)(1), plus 
‘‘(B) the excess (if any) of— 
‘‘(i) the maximum amount allowable 
as a deduction under section 223A(b) (de-
termined without regard to section 139J) 
for the taxable year, over 
‘‘(ii) the amount contributed to first- 
time homebuyer savings accounts for the 
taxable year. 
For purposes of this subsection, any contribu-
tion which is distributed out of the first-time 
homebuyer savings account in a distribution to 
which section 223A(e)(4)(C) applies shall be 
treated as an amount not contributed.’’. 
(e) TAX ON PROHIBITED TRANSACTIONS.— 
(1) Section 4975(c) of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(8) SPECIAL
RULE
FOR
FIRST-TIME
HOME-
BUYER
SAVINGS
ACCOUNTS.—An individual for 
whose benefit a first-time homebuyer savings ac-
count (within the meaning of section 223A(c)) is es-
tablished shall be exempt from the tax imposed by 
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this section with respect to any transaction con-
cerning such account (which would otherwise be tax-
able under this section) if, with respect to such 
transaction, the account ceases to be a first-time 
homebuyer savings account by reason of the applica-
tion of section 223(d)(2) to such account.’’. 
(2) Section 4975(e)(1) of such Code is amended 
by striking ‘‘or’’ at the end of subparagraph (F), by 
redesignating subparagraph (G) as subparagraph 
(H), and by inserting after subparagraph (F) the 
following new subparagraph: 
‘‘(G) a first-time homebuyer savings ac-
count described in section 223A(c).’’. 
(f) PENALTY FOR FAILURE TO FILE REPORTS.— 
Section 6693(a)(2) of such Code is amended by striking 
‘‘and’’ at the end of subparagraph (E), by striking the 
period at the end of subparagraph (F) and inserting ‘‘, 
and’’, and by inserting after subparagraph (F) the fol-
lowing new subparagraph: 
‘‘(G) Section 223A(g) (relating to first- 
time homebuyer savings accounts).’’. 
(g) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) of such Code is amended 
by striking ‘‘and’’ at the end of subparagraph (Y), 
by striking the period at the end of subparagraph 
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(Z) and inserting ‘‘, and’’, and by inserting after 
subparagraph (Z) the following new subparagraph: 
‘‘(AA) section 223A(e)(2) (relating to addi-
tional tax on first-time homebuyer savings ac-
count not used for qualified home ownership ex-
penses).’’. 
(2) Section 408(e)(2)(ii) of such Code is 
amended by inserting ‘‘or to a first-time homebuyer 
savings account under section 223A(e)(7)’’ before 
the period. 
(3) Section 530(d)(9)(A)(ii) of such Code is 
amended by inserting ‘‘, to a first-time homebuyer 
savings account under section 223A(e)(7),’’ after 
‘‘section 408(e)(2)’’. 
(4) Section 877A of such Code is amended— 
(A) in subsection (e)(2) by inserting ‘‘a 
first-time homebuyer savings account (as de-
fined in section 223A),’’ after ‘‘section 223),’’, 
and 
(B) in subsection (g)(6) by inserting 
‘‘223(e)(4),’’ after ‘‘529A(c)(3),’’. 
(5) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by 
inserting after the item relating to section 223 the 
following new item: 
‘‘Sec. 223A. First-time homebuyer savings account.’’. 
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(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
Æ 
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