H.R. 7468

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7468 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7468

To amend the Internal Revenue Code of 1986 to allow certain 
distributions from long-term qualified tuition programs for first home 
purchases, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

February 10, 2026

Mr. Mann (for himself, Mr. Correa, Mr. Alford, Mr. Barrett, Mr. Moylan, 
Mr. McGuire, Mr. Fulcher, Ms. Davids of Kansas, Ms. Mace, and Mr. Bost) 
introduced the following bill; which was referred to the Committee on 
Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to allow certain 
distributions from long-term qualified tuition programs for first home 
purchases, and for other purposes.

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 ``First-Time Home Buyer Empowerment 
Act''.

SEC. 2. SPECIAL RULE FOR CERTAIN DISTRIBUTIONS FROM LONG-TERM QUALIFIED 
TUITION PROGRAMS FOR FIRST HOME PURCHASES.

(a) In General.--Section 529(c)(3) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
``(F) Special rule for certain distributions from 
long-term qualified tuition programs for first home 
purchases.--
``(i) In general.--In the case of a 
distribution from a qualified tuition program 
of a designated beneficiary which has been 
maintained for the 15-year period ending on the 
date of such distribution, subparagraph (A) 
shall not apply to so much of the portion of 
such distribution which--
``(I) does not exceed the aggregate 
amount contributed to the program (and 
earnings attributable thereto) before 
the 5-year period ending on the date of 
the distribution, and
``(II) is used, within 60 days of 
such distribution, for the purchase of 
a principal residence of a first-time 
homebuyer who is such designated 
beneficiary.
``(ii) Aggregate limitation.--This 
subparagraph shall not apply to any 
distribution described in clause (i) to the 
extent that the aggregate amount of such 
distributions with respect to the designated 
beneficiary for the taxable year and all prior 
taxable years exceeds an amount equal to 
$35,000, reduced by the aggregate amount of 
distributions to which subparagraph (E) applies 
with respect to such designated beneficiary for 
such taxable year and all prior taxable years.
``(iii) Special rule where delay in 
acquisition.--If any distribution from a 
qualified tuition program of a designated 
beneficiary fails to meet the requirements of 
subparagraph (A) solely be reason of a delay or 
cancellation of the purchase or construction of 
the residence, the amount of the distribution 
may be contributed to a qualified tuition 
program or ABLE account of such beneficiary, as 
provided in subclauses (I) and (III), 
respectively, of subparagraph (C)(i), 
determined by substituting `120 days' for `60 
days' in such subparagraph, except that--
``(I) subparagraph (C)(iii) shall 
not be applied to such contribution, 
and
``(II) such amount shall not be 
taken into account in determining 
whether subparagraph (C)(iii) applies 
to any other amount.
``(iv) Recapture of tax benefit.--
``(I) In general.--If subparagraph 
(A) does not apply to a distribution by 
reason of this subparagraph and a 
qualifying event occurs before the 
close of the 5-year period beginning on 
the date of the purchase of the 
principal residence with respect to 
which such distribution was used, the 
designated beneficiary's tax for the 
taxable year in which such qualifying 
event occurs shall be increased by an 
amount, determined under regulations, 
equal to the tax which (but for this 
subparagraph) would have been imposed, 
plus interest for the deferral period. 
The amount of any increase determined 
under the preceding sentence shall be 
reduced (but not below zero) by 20 
percent for each full year occurring 
during the period beginning on the date 
of such purchase and ending on the date 
of such qualifying event.
``(II) Qualifying event.--For 
purposes of this clause, the term 
`qualifying event' means, with respect 
to a distribution to which subparagraph 
(A) does not apply by reason of this 
subparagraph, the disposition of the 
principal residence which the 
designated beneficiary purchased using 
such distribution, or the cessation of 
such residence as the principal 
residence of the designated beneficiary 
(and, if married, such designated 
beneficiary's spouse).
``(III) Deferral period.--For 
purposes of this clause, the term 
`deferral period' means, with respect 
to a distribution to which subparagraph 
(A) does not apply by reason of this 
subparagraph, the period beginning with 
the taxable year in which (without 
regard to this subparagraph) the 
distribution would have been includible 
in gross income and ending with the 
taxable year in which the qualifying 
event described in subclause (I) 
occurs.
``(IV) Exceptions.--Rules similar 
to the rules of subparagraphs (A), (B), 
(C), and (E) of section 36(f)(4) shall 
apply for purposes of this 
subparagraph.
``(v) Definitions.--For purposes of this 
subparagraph, the terms `purchase', `principal 
residence', and `first-time homebuyer' have the 
meaning given such terms in section 36(c).''.
(b) Coordination With Aggregate Limitation on Special Rollovers to 
Roth IRAs.--Section 529(c)(3)(E)(ii)(II) of such Code is amended to 
read as follows:
``(II) Aggregate limitation.--This 
subparagraph shall not apply to any 
distribution described in clause (i) to 
the extent that the aggregate amount of 
such distributions with respect to the 
designated beneficiary for the taxable 
year and all prior taxable years 
exceeds an amount equal to $35,000, 
reduced by the aggregate amount of 
distributions to which subparagraph (F) 
applies with respect to such designated 
beneficiary for such taxable year and 
all prior taxable years.''.
(c) Effective Date.--The amendments made by this section shall 
apply to distributions made in taxable years beginning after the date 
of the enactment of this Act.
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