Universal Savings Account Act

Full Title:
Universal Savings Account Act of 2025

Summary#

This bill adds a new type of tax-exempt personal savings account called a Universal Savings Account (USA) to the Internal Revenue Code. A USA must be set up as a trust or custodial account for one person, held by a bank or an approved trustee, and follow rules set by the IRS. Contributions must be in cash and generally cannot exceed annual limits. Distributions are generally not taxed. The bill sets rules for rollovers between accounts, how accounts are treated at death, reporting to the IRS, and limits on investments (for example, no life insurance contracts). It also adds related tax rules and reporting requirements in existing sections of the tax code. The changes apply to taxable years beginning after December 31, 2024.

What it means for you#

  • You could open a Universal Savings Account held by an approved trustee or bank for your exclusive benefit.
  • Contributions must be cash and generally follow annual limits described in the bill.
  • Money taken from the account is generally not included in your taxable income.
  • You can roll over funds from another USA for the same person if you complete the transfer within 60 days.
  • If you die, a surviving spouse who inherits the account is treated as the account holder; other beneficiaries will have the account treated as a distribution at death.
  • The account cannot invest in life insurance contracts, and account balances must not be commingled except in common investment funds.
  • Trustees must report contributions and distributions to the IRS and the account holder.

Expenses#

No publicly available information on costs or federal budget effects is included in the bill text or metadata provided.

Proponents' View#

The bill text identifies the sponsors (Representative Diana Harshbarger and Representative Michael Cloud) and that it was referred to the House Ways and Means Committee. No publicly available information on proponents' stated reasons or arguments is included in the bill text or metadata provided.

Opponents' View#

No publicly available information on opponents' views or criticisms is included in the bill text or metadata provided.