READY Accounts Act
The source supplies the latest action, but no lifecycle stage.
Latest action (4 Jun 2025): Read twice and referred to the Committee on Finance.
What this bill does
The bill, known as the READY Accounts Act, proposes establishing a new type of savings account called a Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) account. Individuals could contribute up to $4,500 annually, with this limit adjusted for inflation starting in 2027. These contributions would be tax-deductible.
The funds within a READY account would be intended for specific home-related expenses. These include costs for disaster mitigation measures, such as installing impact-resistant windows or reinforcing roof structures, as certified by a qualified professional to meet disaster mitigation criteria. Funds could also be used for repairing damage to a principal residence caused by fire, storm, or other casualty, provided the costs are not covered by insurance.
Distributions from a READY account that are not used for these qualified expenses would be subject to regular income tax and a 20% penalty. The bill also states that contributions exceeding the annual limit would face a 6% tax. The bill has been introduced in the Senate and referred to the Committee on Finance.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Official summary
READY Accounts Act
This bill establishes a new Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) account, allows individuals to make tax-deductible contributions of up to $4,500 per year to such accounts (adjusted annually for inflation beginning in 2027), and allows individuals to take tax-free distributions from such accounts to pay for qualified home disaster mitigation and recovery expenses related to a principal residence owned by the taxpayer.
Under the bill, qualified home disaster mitigation expenses include expenses certified by a qualified industry professional as meeting criteria to mitigate damage from a natural or other disaster, including
• installing a roofing underlayment to sheathing, impact-resistant windows, impact-resistant entry doors, or ground anchors;
• replacing a roof covering;
• applying a foam adhesive to reinforce the roof structure;
• strengthening the connection of the roof deck to roof framing, roof-to-wall connections, soffits, or attic ventilation openings;
• elevating a residence; or
Timeline
4 Jun 2025
Read twice and referred to the Committee on Finance.
Common questions
- What does S. 1940 do?
- The bill, known as the READY Accounts Act, proposes establishing a new type of savings account called a Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) account. Individuals could contribute up to $4,500 annually, with this limit adjusted for inflation starting in 2027. These contributions would be tax-deductible. The funds within a READY account would be intended for specific home-related expenses. These include costs for disaster mitigation measures, such as installing impact-resistant windows or reinforcing roof structures, as certified by a qualified professional to meet disaster mitigation criteria. Funds could also be used for repairing damage to a principal residence caused by fire, storm, or other casualty, provided the costs are not covered by insurance. Distributions from a READY account that are not used for these qualified expenses would be subject to regular income tax and a 20% penalty. The bill also states that contributions exceeding the annual limit would face a 6% tax. The bill has been introduced in the Senate and referred to the Committee on Finance.
- Has S. 1940 become law?
- The source does not supply a confirmed lifecycle stage for S. 1940. Check the latest action and official source below.
- Who sponsored S. 1940?
- S. 1940 was sponsored by Sen. Scott, Rick [R-FL] (R-FL), with 1 cosponsor.
- What's the latest action on S. 1940?
- Read twice and referred to the Committee on Finance. (4 Jun 2025).
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