SB3497 - Illinois Home Buyer Savings Accounts Act

• Creates tax-advantaged savings accounts for first-time and second-chance home buyers in Illinois to accumulate funds for down payments and eligible closing costs on single-family residences.

• Allows individual account holders to deduct up to $5,000 annually (or $10,000 for joint filers) in contributions, with earnings excluded from taxable income for up to 10 years, capped at $25,000 total for individual accounts and $50,000 for joint accounts.

• Permits only cash and marketable securities as contributions, with no limits on total account balance; two first-time and second-chance home buyers may jointly own an account if they file a joint tax return.

• Imposes a 10% penalty plus full income taxation on the account balance if funds are withdrawn for non-eligible purposes, with exceptions for death, disability, unemployment, or bankruptcy.

• Requires account holders to submit annual transaction documentation to the Department of Revenue and establishes financial institution responsibilities for account designation and yearly statements, while exempting institutions from tracking fund usage or reporting to government agencies.