US HB7185

Excludes from gross income retirement plan distributions used for down payments or closing costs on a principal residence, covering defined contribution plans, 403(a) and 403(b) annuity plans, individual retirement accounts, and 457(b) government deferred compensation plans

Allows tax-free distributions for home purchases by the account holder or eligible relatives, including spouses, children, grandchildren, and ancestors of the account holder or their spouse

Exempts qualifying transfers to eligible relatives from federal gift tax under Section 2503(a)

Applies to distributions made in taxable years beginning after December 31, 2025, with a termination date of December 31, 2030

Introduced January 21, 2026 by Rep. McGuire and referred to the House Committee on Ways and Means