The bill would create tax-exempt accounts for children under age 18. Contributions would generally have to be cash and could not exceed $5,000 per year, with the limit adjusted for inflation after 2026. The money could be invested only in certain diversified funds tracking U.S. stocks. Account earnings used for approved expenses, such as higher education, certain job credentials, some small-business or farm loans, or a first home purchase, would receive special tax treatment. Other taxable withdrawals before age 30 could face an additional 10% tax. Accounts would end when the beneficiary turns 31.
The bill would also provide a one-time $1,000 tax credit, paid directly into an account, for eligible children born from 2025 through 2028 who are U.S. citizens at birth. If an eligible child has no account, the Treasury Secretary would establish one, with a chance for the parent or guardian to decline.
If you have an eligible child, you could open an account and contribute within the annual limit. The bill's one-time $1,000 credit would apply to a taxpayer with an eligible child who is their qualifying child, subject to required Social Security number rules. Account funds would have investment and withdrawal limits. The bill says its changes would apply to tax years beginning after December 31, 2024, but regular contributions could not be accepted before January 1, 2026.
The bill provides for a one-time $1,000 credit deposited into each qualifying child's account. No publicly available information is provided about the bill's total cost or other expenses.
No publicly available information.
No publicly available information.