Sponsors
Updated 5 hours ago
Last progress July 4, 2025 (7 months ago)
Referred to the House Committee on Ways and Means.
Last progress May 14, 2025 (9 months ago)
Introduced on May 14, 2025 by Blake D. Moore
Creates a new type of tax-advantaged child savings account called a "MAGA account," sets tax rules for contributions, distributions, excess contributions, and reporting, and authorizes Treasury disclosures to facilitate contributions. Also establishes a one-time pilot program that deposits a $1,000 tax credit for each eligible child directly into that child’s MAGA account and requires the IRS to open accounts and set default trustees when needed. The new account rules and the pilot credit take effect for taxable years beginning after December 31, 2024; the law adds penalties and reporting requirements, requires Social Security numbers for claims of the credit, and assigns administrative responsibilities to the Secretary/Treasury and IRS to implement and enforce the program.
Add a new part to Subchapter F (Title 26, Chapter 1).
Add a new paragraph (12) to Section 1(h) titled “Distributions from MAGA account taxed as net capital gain,” stating that for purposes of that subsection the term “net capital gain” means the net capital gain (determined without regard to this paragraph) increased by the amount includible in net capital gain under this paragraph by reason of section 530A(d)(2).
Amend Section 4973(a) by removing language at the end of paragraph (5), inserting at the end of paragraph (6), and inserting a new paragraph (7) that references a MAGA account (as defined in section 530A(b)).
Add a new subsection defining “excess contributions” for MAGA accounts. For MAGA accounts, excess contributions equal the sum of: (1) the amount by which contributions for the calendar year (other than qualified rollover contributions) exceed the contribution limit under section 530A(c)(1) (determined without regard to contributions described in section 530A(c)(2)), and (2) the amount determined under this subsection for the preceding calendar year, reduced by the excess (if any) of the maximum allowable contribution under section 530A(c)(1) for the calendar year over the amount actually contributed for that year (other than qualified rollovers).
Add a new paragraph (23) to Section 6103(l) allowing the Secretary of the Treasury to disclose specified return information with respect to a MAGA account to officers and employees of a bureau or office of the Department of the Treasury upon a written request signed by the head of that bureau or office, to the extent necessary to carry out section 530A(l).
Who is affected and how:
Children (eligible children): Primary beneficiaries — each eligible child may receive a one-time $1,000 credit deposited into a MAGA account established for them. Over time, MAGA accounts may be available to accumulate savings for the child subject to the tax rules the law sets.
Parents, guardians, and families: Must provide Social Security numbers on tax returns to claim the pilot credit, may receive notices about account creation and default trustees, and will face new reporting or documentation responsibilities when contributing or claiming the credit. Families will not receive the $1,000 credit as a direct refund — it goes to the child’s MAGA account.
Taxpayers generally: Some taxpayers (parents/claimants) will need to adjust tax filing practices and ensure accurate SSN reporting. Improper claims can trigger penalties.
IRS and Treasury (federal tax administration): Will need to build account-creation and account-management processes, administer the pilot credit payments into accounts, implement reporting rules, collect taxes on excess contributions, enforce penalties, and adopt procedures for permitted disclosures to facilitate contributions. This requires systems changes and administrative resources.
Financial institutions, trustees, and third-party contribution services: May be engaged to receive, hold, or invest MAGA account assets; Treasury disclosure authority to facilitate contributions could allow third-party platforms to participate, subject to new rules and reporting.
Fiscal and operational effects:
Overall, the legislation creates a narrowly targeted child-account program with an initial deposit mechanism, modifies tax code rules to govern accounts and overcontributions, and shifts implementation and enforcement responsibilities to tax administrators.