Sponsor
Richard Lynn Scott
Senator · R-FL
Senator · R-FL
The bill creates a new tax-advantaged "American Dream Account" and Roth rollover pathway to boost saving, but imposes new reporting, compliance requirements, penalty risks for overcontributions, and near-term planning uncertainty.
Individuals (taxpayers, middle-class families, parents) gain a new tax-favored "American Dream Account" for saving, expanding tax-preferred retirement/education-style saving options.
Account holders can roll over American Dream Account balances into Roth IRAs, enabling tax-free growth on converted funds for those who use the rollover option.
The bill clarifies excess-contribution rules and reporting requirements, improving transparency and reducing opportunities for abuse or confusion for account holders and providers.
Account holders who exceed annual contribution limits face excise taxes, creating a financial penalty risk for savers who miscalculate or inadvertently overcontribute.
Trustees and issuers must comply with new reporting obligations and face penalties for failures, increasing administrative burdens and likely raising provider costs.
Including these accounts in prohibited-transaction rules may limit certain transactions and raise compliance costs for plan administrators and providers, potentially reducing product features or increasing fees.
Based on analysis of 4 sections of legislative text.
Creates a new tax-favored “American dream account” and integrates it into excise-tax, prohibited-transaction, reporting-penalty, and Roth rollover rules of the Internal Revenue Code.
Official title: Amend the Internal Revenue Code of 1986 to create American dream accounts.
Introduced March 9, 2026 by Richard Lynn Scott · Last progress March 9, 2026
Creates a new tax-favored account called an “American dream account” and integrates that account type into several parts of the Internal Revenue Code. The bill makes American dream accounts subject to existing excess-contribution excise tax rules, the prohibited-transaction rules for tax-favored plans, certain IRS reporting-penalty provisions, and permits rollovers to Roth IRAs as specified. All changes apply for taxable years beginning after December 31, 2026.