# Plain Language Summary: READY Accounts Act

The READY Accounts Act creates a new type of savings account that allows people to set aside money for emergencies and unexpected expenses without losing eligibility for government assistance programs. Right now, if you receive benefits like food stamps, housing assistance, or Medicaid, having too much money in savings can disqualify you from those programs. This bill changes that by letting you save up to a certain amount in a special "READY account" without it counting against your eligibility limits. The money you put into these accounts stays protected and doesn't affect your benefits, which means you can actually build a financial cushion without fear of losing the help you depend on.

The main benefit is that this gives lower-income families a real way to prepare for emergencies—like a car repair, medical bill, or job loss—without immediately losing their safety net. Instead of having to spend down their savings to stay eligible for assistance, people can keep money set aside specifically for emergencies. This encourages financial stability and responsibility while still allowing people to access the government support they need. The accounts work like regular savings accounts, but the government treats them differently when determining whether someone qualifies for assistance programs.

This bill essentially recognizes that having some savings is actually a sign of financial health, not a reason to cut someone off from help. It removes a catch-22 that many struggling families face: either stay poor enough to qualify for benefits or try to save money and lose those benefits. By creating READY accounts, the law gives people a path toward greater financial security while maintaining access to the assistance programs that help them get there.

READY Accounts Act

Scott, Rick

READY Accounts ActThis bill establishes a new Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) account, allows individuals to make tax-deductible contributions of up to $4,500 per year to such accounts (adjusted annually for inflation beginning in 2027), and allows individuals to take tax-free distributions from such accounts to pay for qualified home disaster mitigation and recovery expenses related to a principal residence owned by the taxpayer.Under the bill, qualified home disaster mitigation expenses include expenses certified by a qualified industry professional as meeting criteria to mitigate damage from a natural or other disaster, including<ul><li>installing a roofing underlayment to sheathing, impact-resistant windows, impact-resistant entry doors, or ground anchors;</li><li>replacing a roof covering;</li><li>applying a foam adhesive to reinforce the roof structure;</li><li>strengthening the connection of the&nbsp;roof deck to roof framing, roof-to-wall connections, soffits, or attic ventilation openings;</li><li>elevating a residence; or</li><li>achieving the current building code standard.</li></ul>Qualified home disaster recovery expenses include costs for&nbsp;repairing damage to a residence resulting from fire, storm, or other casualty (provided such costs are not reimbursed).Distributions from a READY account used for anything other than qualified home disaster mitigation and recovery expenses must be included in gross income and are subject to a 20% penalty. (Some exceptions apply.)Finally, the bill imposes a 6% tax on contributions in excess of the annual limit. (Some exceptions apply.)&nbsp;