S. 1940 · Where this bill is now
In committee
Introduced in the Senate, Jun 4, 2025
What this bill does
In plain words · AI-written from the official summaryNew savings accounts for home disaster protection
The bill creates a special savings account called a READY account that lets people set aside money to protect their homes from disasters or repair damage after one happens. You can contribute up to $4,500 per year (the limit will increase with inflation starting in 2027) and the money grows without being taxed. When you need it, you can withdraw the money tax-free to pay for things like reinforcing your roof, installing impact-resistant windows and doors, elevating your home, or fixing damage from fire, storms, or other disasters.
How it affects you
If you own a home in an area prone to natural disasters, this account gives you a way to save money specifically for making your house more resistant to damage or for rebuilding after a disaster, while getting tax benefits. The money you put in is tax-deductible, and if you use it for qualified home protection or recovery, you won't pay taxes on it when you withdraw it. If you use the money for something else, you'd have to pay taxes on it plus a 20% penalty.
Read the official summary (Introduced in Senate, Jun 4, 2025)
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.)
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionS. 1940
A BILL
READY Accounts Act
Sponsor: Sen. Rick Scott (R-FL) · Introduced Jun 4, 2025 · Taxation · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Jun 4, 2025: “Read twice and referred to the Committee on Finance.”