Home Modification for Accessibility Act of 2022
Bill: H.R.7676 | Sponsor: Rep. Crist, Charlie (D-FL)
Policy area: Taxation

Summary:
Home Modification for Accessibility Act of 2022
This bill allows distributions from a tax-exempt retirement plan, without penalty, for retirement home improvements to an individual's primary residence to improve for aging or disabled adults the accessibility, security, or safety of such residence. The bill limits the amount of such distributions to $30,000 for all taxable years.
The bill also excludes the amount of such distributions from the recipient's gross income, for income tax purposes, and allows a deduction for a taxpayer's retirement home improvement expenditures.

To amend the Internal Revenue Code of 1986 to assist homeowners in 
making safety, security, and accessibility improvements to their homes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Modification for Accessibility 
Act of 2022''.

SEC. 2. DISTRIBUTIONS FROM RETIREMENT PLANS IN CASE OF CERTAIN 
              ACCESSIBILITY, SECURITY, AND SAFETY HOME IMPROVEMENTS.

    (a) Not Subject to Early Distribution Penalty.--Section 72(t)(2) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(I) Distribution from retirement plans in case of 
                certain accessibility, security, and safety home 
                improvements.--
                            ``(i) In general.--Any qualified retirement 
                        home improvement distribution.
                            ``(ii) Qualified retirement home 
                        improvement distribution.--For purposes of this 
                        subparagraph, the term `qualified retirement 
                        home improvement distribution' means any 
                        distribution made before the date on which the 
                        employee attains age 59\1/2\ from an applicable 
                        eligible retirement plan (as defined in 
                        subparagraph (H)(vi)(I)) to the extent such 
                        distributions do not exceed for the taxable 
                        year amounts paid or incurred--
                                    ``(I) by the individual with 
                                respect to the individual's primary 
                                residence (within the meaning of 
                                section 121), and
                                    ``(II) to improve for aging or 
                                disabled adults the accessibility, 
                                security, or safety of such residence.
                            ``(iii) Limitation.--The aggregate amount 
                        which may be treated as qualified retirement 
                        home improvement distributions by any 
                        individual for all taxable years shall not 
                        exceed $30,000.
                            ``(iv) Special rules.--For purposes of this 
                        subparagraph--
                                    ``(I) Exemption of distributions 
                                from trustee to trustee transfer and 
                                withholding rules.--For purposes of 
                                sections 401(a)(31), 402(f), and 3405, 
                                a qualified retirement home improvement 
                                distribution shall not be treated as an 
                                eligible rollover distribution.
                                    ``(II) Distributions treated as 
                                meeting plan distribution 
                                requirements.--Any qualified retirement 
                                home improvement distribution shall be 
                                treated as meeting the requirements of 
                                sections 401(k)(2)(B)(i), 
                                403(b)(7)(A)(ii), 403(b)(11), and 
                                457(d)(1)(A).''.
    (b) Excluded From Gross Income.--Part III of subchapter B of 
chapter 1 of such Code is amended by inserting before section 140 the 
following new section:

``SEC. 139J. QUALIFIED RETIREMENT HOME IMPROVEMENT DISTRIBUTIONS.

    ``Gross income shall not include any amount treated as a qualified 
retirement home improvement distribution under section 72(t)(2)(I).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2021.

SEC. 3. RETIREMENT HOME IMPROVEMENT DEDUCTION.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 224 
as section 225 and by inserting after section 223 the following new 
section:

``SEC. 224. RETIREMENT HOME IMPROVEMENT DEDUCTION.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction for the taxable year an amount equal to the 
qualified retirement home improvement expenditures of the taxpayer for 
the taxable year.
    ``(b) Limitation.--The amount of qualified retirement home 
improvement expenditures taken into account under subsection (a) for 
the taxable year shall not exceed an amount equal to the excess (if 
any) of--
            ``(1) $30,000, over
            ``(2) the sum of--
                    ``(A) the aggregate amount of qualified retirement 
                home improvement expenditures taken into account by the 
                individual under subsection (a) for all preceding 
                taxable years, and
                    ``(B) the aggregate amount taken into account under 
                section 72(t)(2)(I) by the individual in determining 
                whether a distribution is a qualified retirement home 
                improvement distribution that is excluded from gross 
                income under section 139J.
    ``(c) Qualified Retirement Home Improvement Expenditures.--For 
purposes of this section, the term `qualified retirement home 
improvement expenditures' means amounts paid or incurred--
            ``(1) by an individual who has attained the age of 59\1/2\,
            ``(2) with respect to the individual's primary residence 
        (within the meaning of section 121), and
            ``(3) to improve for aging or disabled adults the 
        accessibility, security, or safety of such residence.''.
    (b) Deduction Allowed Without Regard to Whether Taxpayer 
Itemizes.--Section 62(a) of such Code is amended by inserting after 
paragraph (21) the following new paragraph:
            ``(22) Retirement home improvements.--The deduction allowed 
        by section 224.''.
    (c) Deduction Not Allowed for Purposes of Alternative Minimum 
Tax.--Section 56(b)(1)(A) of such Code is amended by striking ``or'' at 
the end of clause (i), by striking the period at the end of clause (ii) 
and inserting ``, or'', and by inserting after clause (ii) (as so 
amended) the following:
                            ``(iii) the deduction allowed by section 
                        224.''.
    (d) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the item 
relating to section 224 and inserting the following:

``Sec. 224. Retirement home improvement deduction.
``Sec. 225. Cross reference.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 2022.

SEC. 4. RECEIPT AND REPORTING REQUIREMENTS FOR TAX BENEFITS RELATING TO 
              RETIREMENT HOME IMPROVEMENTS.

    (a) Establishment of Receipt Requirements.--The Secretary of the 
Treasury shall, not later than 90 days after the date of the enactment 
of this Act, prescribe such receipt requirements as may be necessary to 
carry out the purposes and prevent the abuse of sections 72(t)(2)(I) 
and 224 of the Internal Revenue Code of 1986 (as added by this Act).
    (b) Reports by Secretary.--The Secretary of the Treasury shall, not 
later than November 30, 2023, and annually thereafter, submit to 
Congress a report detailing the extent to which taxpayers use sections 
72(t)(2)(I) and 224.
                                 <all>