hold on there's just too much going on in Congress lmao...
Allows tax-free retirement withdrawals for home down payments or closing costs.
Introduced by Mr. McGuire to help individuals and families buy homes.
Introduced in the House, in committee.
This bill would allow people to withdraw money from their retirement accounts (like 401(k)s and IRAs) without paying income tax on it, as long as it's used for a down payment or closing costs on a primary home. This benefit would also apply if the money is used by a spouse, child, grandchild, or ancestor to buy their primary home, and these transfers would be gift-tax free. The changes would apply from 2026 through the end of 2030. The bill was introduced by Mr. McGuire in the House and referred to the Ways and Means Committee, meaning it's in the very early stages of the legislative process.
Introduced Jan 21, 2026
This bill is currently in the 'Introduced' stage. It was referred to the House Committee on Ways and Means. For it to become law, it would typically need to pass this committee, then be voted on by the full House, then pass the Senate, and finally be signed by the President. There are no scheduled votes or known dates yet.
If this bill passes, individuals could access funds from their 401(k)s, IRAs, and other defined contribution plans to cover the down payment and closing costs of a principal residence without paying income tax on the withdrawal. This provision extends to helping immediate family members (spouse, children, grandchildren, or ancestors) purchase their own primary home, and these transfers would also be exempt from gift taxes. However, this tax-free benefit is set to expire at the end of 2030, meaning it's a temporary measure to assist with homeownership.
Supporters Say
Supporters would likely argue this bill helps individuals and families achieve homeownership by making it easier to afford down payments.
Critics Say
Critics might argue it could reduce long-term retirement savings, potentially leading to future financial insecurity, or could inflate housing prices.
Those in favor would highlight the challenge of saving for a down payment, especially for younger generations or first-time homebuyers, and how this bill provides a direct financial incentive. Opponents, however, might raise concerns about the long-term implications for retirement security, as tapping into these funds early could leave less money for later life. They might also point out that widespread use could increase demand for housing, potentially driving up costs.