Section 1 Short title
This Act may be cited as the “Home Modification for Accessibility Act of 2022”.
Home Modification for Accessibility Act of 2022
A BILL
To amend the Internal Revenue Code of 1986 to assist homeowners in making safety, security, and accessibility improvements to their homes.
Sec. 2 Distributions from retirement plans in case of certain accessibility, security, and safety home improvements
Not subject to early distribution penalty— Section 72(t)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
“(I) Distribution from retirement plans in case of certain accessibility, security, and safety home improvements
“(i) In general—Any qualified retirement home improvement distribution.
“(ii) Qualified retirement home improvement distribution—For purposes of this subparagraph, the term qualified retirement home improvement distribution means any distribution made before the date on which the employee attains age 591/2 from an applicable eligible retirement plan (as defined in subparagraph (H)(vi)(I)) to the extent such distributions do not exceed for the taxable year amounts paid or incurred—
“(I) by the individual with respect to the individual’s primary residence (within the meaning of section 121), and
“(II) to improve for aging or disabled adults the accessibility, security, or safety of such residence.
“(iii) Limitation—The aggregate amount which may be treated as qualified retirement home improvement distributions by any individual for all taxable years shall not exceed $30,000.
“(iv) Special rules—For purposes of this subparagraph—
“(I) Exemption of distributions from trustee to trustee transfer and withholding rules—For purposes of sections 401(a)(31), 402(f), and 3405, a qualified retirement home improvement distribution shall not be treated as an eligible rollover distribution.
“(II) Distributions treated as meeting plan distribution requirements—Any qualified retirement home improvement distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A).”
Excluded from gross income— Part III of subchapter B of chapter 1 of such Code is amended by inserting before section 140 the following new section:
“139J. Qualified retirement home improvement distributions
“Gross income shall not include any amount treated as a qualified retirement home improvement distribution under section 72(t)(2)(I).”
Effective date— The amendments made by this section shall apply to distributions made after December 31, 2021.
Sec. 3 Retirement home improvement deduction
In general— Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:
“224. Retirement home improvement deduction
“(a) In general—In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the qualified retirement home improvement expenditures of the taxpayer for the taxable year.
“(b) Limitation—The amount of qualified retirement home improvement expenditures taken into account under subsection (a) for the taxable year shall not exceed an amount equal to the excess (if any) of—
“(1) $30,000, over
“(2) the sum of—
“(A) the aggregate amount of qualified retirement home improvement expenditures taken into account by the individual under subsection (a) for all preceding taxable years, and
“(B) the aggregate amount taken into account under section 72(t)(2)(I) by the individual in determining whether a distribution is a qualified retirement home improvement distribution that is excluded from gross income under section 139J.
“(c) Qualified retirement home improvement expenditures—For purposes of this section, the term qualified retirement home improvement expenditures means amounts paid or incurred—
“(1) by an individual who has attained the age of 59½,
“(2) with respect to the individual’s primary residence (within the meaning of section 121), and
“(3) to improve for aging or disabled adults the accessibility, security, or safety of such residence.”
Deduction allowed without regard to whether taxpayer itemizes— Section 62(a) of such Code is amended by inserting after paragraph (21) the following new paragraph:
“(22) Retirement home improvements—The deduction allowed by section 224.”
Deduction not allowed for purposes of alternative minimum tax— Section 56(b)(1)(A) of such Code is amended by striking “or” at the end of clause (i), by striking the period at the end of clause (ii) and inserting “, or”, and by inserting after clause (ii) (as so amended) the following:
“(iii) the deduction allowed by section 224.”
Clerical amendment— The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 224 and inserting the following:
Effective date— The amendments made by this section shall apply to amounts paid or incurred after December 31, 2022.
Sec. 4 Receipt and reporting requirements for tax benefits relating to retirement home improvements
Establishment of receipt requirements— The Secretary of the Treasury shall, not later than 90 days after the date of the enactment of this Act, prescribe such receipt requirements as may be necessary to carry out the purposes and prevent the abuse of sections 72(t)(2)(I) and 224 of the Internal Revenue Code of 1986 (as added by this Act).
Reports by Secretary— The Secretary of the Treasury shall, not later than November 30, 2023, and annually thereafter, submit to Congress a report detailing the extent to which taxpayers use sections 72(t)(2)(I) and 224.