To amend the Internal Revenue Code of 1986 to allow a credit against tax for qualified multigenerational housing expenses, and for other purposes.

Bill Number

H.R. 7584

Origin Chamber

House

Congress

119th Congress, Session 2

Status

Introduced

Latest Action

2026-02-13: Referred to the House Committee on Ways and Means.

Last Updated

2026-02-14T09:06:01Z

AI-Generated Summary

Purpose

The Multigenerational Family Tax Credit Act of 2026 aims to encourage multigenerational living by providing financial relief to families who make home modifications to support elderly or disabled relatives. It does this by offering a tax credit for expenses that improve the safety, mobility, or accessibility of a taxpayer's primary home.

Key Provisions

• Tax Credit Amount: Taxpayers can claim a credit of up to $8,000 per year for qualified expenses paid or incurred during the taxable year. This credit reduces the amount of federal income tax owed.
• Income Limits: The credit phases out for higher earners. It decreases by $50 for every $1,000 (or partial $1,000) that a taxpayer's modified adjusted gross income exceeds $200,000 (or $400,000 for married couples filing jointly). Modified adjusted gross income is the taxpayer's adjusted gross income plus certain foreign income exclusions.
• Qualified Expenses: These include costs directly related to enhancing the safety, mobility, or accessibility (e.g., installing ramps, grab bars, or wider doorways) of the taxpayer's principal residence to support a "qualified relative."
• A qualified relative is a family member (such as a parent, grandparent, child, grandchild, sibling, or in-law, with limited in-law definitions) who is either 65 or older by year-end or disabled (as defined under tax rules for retirement distributions). They must live in the taxpayer's home for more than half the year.
• Refundable Portion: 50% of the credit is refundable, meaning eligible taxpayers can receive it as a payment even if they owe no tax (similar to a refund check).
• No Double Benefits: Taxpayers cannot claim other tax credits or deductions for the same expenses, and the cost basis of any improved property is reduced by the credit amount.
• Inflation Adjustment: Starting in 2028, the $8,000 limit will increase annually based on inflation, rounded to the nearest $100.
• Effective Date: Applies to tax years beginning after December 31, 2026.
• Administration: The IRS (Internal Revenue Service) will issue regulations to implement the credit.

Significant Changes to Existing Law

This bill adds a new section (25G) to the Internal Revenue Code of 1986, creating a dedicated tax credit for multigenerational housing modifications. It includes conforming updates to related tax code sections, such as those governing refundable credits and overpayment definitions, to integrate this new benefit. No existing credits for similar home improvements (e.g., energy efficiency credits) are directly altered, but the "no double benefits" rule prevents overlap.

Potential Impacts

• On Citizens: Families living with elderly or disabled relatives may save on home modification costs, making it easier and more affordable to age in place or provide care at home. This could reduce reliance on nursing homes or external care services, potentially lowering personal healthcare expenses. Lower- and middle-income families benefit most due to the income phase-out and refundable feature.
• On Government Agencies: The IRS will need to process additional claims, update forms, and enforce eligibility, which may increase administrative workload and costs. The U.S. Treasury could see reduced tax revenue from the credit, estimated in billions over time depending on uptake.
• On International Relations: No direct impact, as this is a domestic tax policy focused on U.S. households.

Main Stakeholders Affected

• Taxpayers with Multigenerational Households: Primary beneficiaries, especially those supporting aging parents, disabled family members, or adult children.
• Elderly and Disabled Individuals: Indirectly benefit through safer, more accessible living environments that support independence.
• Home Improvement Industry: Contractors, builders, and suppliers of accessibility products (e.g., ramps, elevators) may see increased demand.
• Internal Revenue Service (IRS): Responsible for verifying claims, issuing refunds, and preventing abuse.
• Federal Government: Faces revenue loss but advances social goals like family caregiving.

Notable Legal, Constitutional, or Political Implications

• Legal: The credit aligns with existing tax code structures for family-related deductions (e.g., dependent care), but introduces specific eligibility tied to residency and relationships, which could lead to disputes over "principal residence" or disability definitions. The IRS's regulatory authority ensures flexible implementation without needing further legislation.
• Constitutional: No apparent issues; tax credits are a standard congressional power under Article I, Section 8, and this promotes equal treatment without discriminating based on protected classes.
• Political: Supports policies favoring family unity and reducing elder care burdens, potentially appealing to demographics concerned with aging populations and housing affordability. It may spark debates on tax equity, as benefits skew toward homeowners and phase out for high earners, but avoids broader fiscal controversies by capping the credit.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Rivas, Luz M. [D-CA-29]

Recent Actions

• 2026-02-13: Referred to the House Committee on Ways and Means.
• 2026-02-13: Introduced in House
• 2026-02-13: Introduced in House

Bill Versions

• Multigenerational Family Tax Credit Act of 2026 — issued 2026-02-13 — PDF (6 pages)