MS HB1601

Establishes first-time home buyer savings accounts that allow taxpayers to set aside funds for down payments and closing costs on a single-family residence in Mississippi.

Excludes contributions, interest, and distributions from these accounts from state gross income, subject to annual contribution limits of $2,500 for individual filers and $5,000 for married couples filing jointly.

Requires account holders to maintain documentation of account segregation and eligible costs, and to file forms with their tax returns developed by the Department of Revenue.

Imposes a 10% penalty on non-qualifying withdrawals (except for death, disability, or bankruptcy), with those funds added back to gross income as taxable income.

Exempts financial institutions from regulatory obligations to designate accounts, track fund usage, or report information to the Department of Revenue; effective January 1, 2017.