American Opportunity Accounts: Government Savings for Children's Future Wealth
This Act establishes tax-exempt American Opportunity Accounts (AO Accounts) for children born after December 31, 2007, funded by government contributions. Citizens will receive an initial $1,000 contribution (for those born after 2023) and annual contributions based on household income, with higher amounts directed towards lower-income families. These funds can be used after age 18 for qualified expenses like higher education, homeownership, or other long-term wealth-building investments, and crucially, the account balances will not affect eligibility for other federal benefits.
Key points
Automatic creation of tax-exempt savings accounts (AO Accounts) for eligible individuals born after December 31, 2007.
Government provides annual contributions ranging from $0 to $2,000, scaled based on household income, prioritizing families below 100% of the poverty line.
Funds can be distributed after the account holder turns 18 for qualified expenses, including higher education, homeownership, or other long-term wealth-building investments.
Account balances are disregarded when determining eligibility for all Federal benefits, including student financial aid.
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