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Emergency Savings Accounts: Tax Relief for Unexpected Expenses

This bill introduces a new type of emergency savings account, allowing individuals to save money for unforeseen events like natural disasters or public health crises. Contributions to these accounts will be tax-deductible, potentially lowering tax burdens and encouraging financial preparedness. Funds can be used for specific expenses related to disasters, public health emergencies, or unemployment.
Key points
Allows tax deductions for contributions to emergency savings accounts, up to a limit of $5,000 per year.
Funds from the account can be used for expenses related to natural disasters (e.g., home repairs after a flood), public health emergencies (e.g., childcare, healthcare costs, rent during unemployment), and minor unemployment-related expenses.
Withdrawals for purposes other than those specified in the act will be taxed and subject to an additional 20% penalty, unless due to disability or death.
Accounts are tax-exempt as long as they meet the act's conditions, and assets cannot be invested in life insurance or commingled with other property, except in common investment funds.
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Additional Information
Print number: 118_HR_312
Sponsor: Rep. Cloud, Michael [R-TX-27]
Process start date: 2023-01-12
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Emergency Savings Accounts Act of 2023

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_HR_312.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2023-01-12.

What are the main provisions?

Key points include:

  • Allows tax deductions for contributions to emergency savings accounts, up to a limit of $5,000 per year.
  • Funds from the account can be used for expenses related to natural disasters (e.g., home repairs after a flood), public health emergencies (e.g., childcare, healthcare costs, rent during unemployment), and minor unemployment-related expenses.
  • Withdrawals for purposes other than those specified in the act will be taxed and subject to an additional 20% penalty, unless due to disability or death.
  • Accounts are tax-exempt as long as they meet the act's conditions, and assets cannot be invested in life insurance or commingled with other property, except in common investment funds.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Cloud, Michael [R-TX-27].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-25.

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