Sponsor
Richard Lynn Scott
Senator · R-FL
Senator · R-FL
Provides an above-the-line tax break for homeowners' insurance to lower AGI and help affordability, but reduces federal revenue, tends to favor higher-income homeowners, and increases IRS administrative complexity.
Homeowners (and other taxpayers, including non-itemizers) can deduct up to $10,000 in annual homeowners insurance premiums as an above-the-line deduction, lowering adjusted gross income and reducing tax burdens which can improve homeownership affordability and household financial stability.
All taxpayers may face higher federal deficits or necessitate spending offsets because the new deduction reduces federal revenue.
Higher-income homeowners are likely to receive larger absolute tax benefits (since they often pay higher premiums), so the provision disproportionately helps wealthier homeowners rather than being well-targeted to low-income households.
The new deduction adds administrative complexity for the IRS and taxpayers because it creates a new code provision and definitions that will require guidance, enforcement, and potentially more filing burden.
Based on analysis of 2 sections of legislative text.
Adds an above-the-line deduction allowing individuals to deduct up to $10,000 of annual homeowners insurance premiums for their principal residence.
Official title: Amend the Internal Revenue Code of 1986 to create an above the line deduction for certain homeowners insurance premiums.
Introduced January 8, 2025 by Richard Lynn Scott · Last progress January 8, 2025
Creates a new above-the-line (adjustment) deduction that lets taxpayers deduct up to $10,000 of annual homeowners insurance premiums for their principal residence. The deduction is added to the list of adjustments to income and applies to tax years ending after enactment.