American Dream Accounts Act of 2026

Summary

Creates a new, tax-advantaged savings account type called “American dream accounts” in the Internal Revenue Code and treats those accounts like other tax-favored accounts for several existing tax rules. The bill adds a new provision (new section 530B) and amends several code sections to apply excess-contribution taxes, prohibited-transaction rules, reporting penalties, and Roth IRA rollover rules to these accounts. The measure also inserts a table entry for the new part of Subchapter F and makes the changes effective for taxable years beginning after December 31, 2026. The text does not specify contribution limits, distribution rules, or the permitted uses of account funds, so IRS guidance and implementing guidance for financial institutions will be needed for rollout.

• Establishes a new tax-advantaged account type called "American dream accounts" (new Code provision referenced as section 530B).
• Amends the excess-contribution tax rules to cover American dream accounts.
• Adds American dream accounts to prohibited-transaction rules that apply to other tax-advantaged accounts.
• Extends reporting-penalty provisions to apply to these accounts, increasing information obligations for account holders and providers.
• Clarifies that rollovers to Roth IRAs rules apply to American dream accounts where appropriate.
• Inserts a clerical table-of-parts entry for the new part of Subchapter F in the Code.
• Effective for taxable years beginning after December 31, 2026.
• The text does not include contribution limits, eligible uses, or distribution rules—those will require further guidance or future legislation.
• Will require IRS guidance and operational updates by financial institutions and plan administrators.