This bill changes section 529 of the tax code. It lets a designated beneficiary use some money from a long-term qualified tuition program (a 529 account) to buy a first principal residence. The rule applies only if the 529 account has been maintained for 15 years before the distribution. The portion allowed is the amount contributed (and earnings on those contributions) more than 5 years before the distribution. The money must be used within 60 days to buy the home for the designated beneficiary, who must be a first-time homebuyer. The bill sets an aggregate limit of $35,000 per beneficiary (reduced by certain other special rollovers). If a purchase is delayed or canceled, the distribution may be redeposited into a 529 or ABLE account within 120 days under specific rules. If the homeowner sells or stops using the house as their principal residence within 5 years, a tax increase (recapture) may apply; the recapture amount can be reduced by 20% for each full year before the qualifying event. The bill also updates coordination rules with special Roth IRA rollovers and takes effect for taxable years beginning after enactment.
No publicly available information on budgetary costs or revenue effects is included in the bill text or provided metadata.
No publicly available statements of proponents' arguments or supporting analyses are included in the bill text or provided metadata. The bill text shows its purpose is to allow certain long-held 529-account distributions to be used for first home purchases under defined conditions.
No publicly available statements of opponents' arguments or analyses are included in the bill text or provided metadata.