READY Accounts Act
Latest action (4 Jun 2025): Introduced
What this bill does
Generate a neutral, plain-English explanation of what this bill does, who it affects and what happens next — grounded in the official text.
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
Common questions
- What does S. 1940 do?
- 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 • achieving the current building code standard. Qualified home disaster recovery expenses include costs for repairing damage to a residence resulting from fire, storm, or other casualty (provided such costs are not reimbursed). Distributions from a READY account used for anything other than qualified home disaster mitigation and recovery expenses must be included in gross income and are subject to a 20% penalty. (Some exceptions apply.) Finally, the bill imposes a 6% tax on contributions in excess of the annual limit. (Some exceptions apply.)
- Has S. 1940 become law?
- Not yet. As of 4 Jun 2025, S. 1940 is introduced.
- Who sponsored S. 1940?
- S. 1940 was sponsored by Sen. Rick Scott [R-FL] (Republican-FL), with 1 cosponsor.
- What's the latest action on S. 1940?
- Introduced (4 Jun 2025).
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