Home Modification Bill Backers Seek Insurer and Advisor Support

What You Need to Know

Taxpayers over age 59 1/2 could take up to $30,000 in qualified retirement home improvement distributions.
Eligible taxpayers could take the QRHIDs without paying early distribution penalties or paying income taxes on the distributions.
Charlie Crist, the sponsor, has lined up one Democrat and one Republican as cosponsors.

A group with roots in the home remodeling industry is seeking support from life insurers and other financial services players for H.R. 7676, the “Home Modification for Accessibility Act of 2022” bill.

The bill would let clients ages 59 1/2 and older take penalty-free “ qualified retirement home improvement distributions” from 401(k) plans, 403(b) plans or 457 plans.

Eligible clients could use the QRHID cash to make a primary residence more secure, safer for older adults, or more accessible for older adults without paying federal income taxes on the distributions.

Rep. Charlie Crist, R-Fla., introduced the bill at the request of the Washington-based HomesRenewed Coalition.

What It Means

If H.R. 7676 became law, the new tax deduction could give clients another reason to tap their retirement plans.

But, if the new law was implemented as written and worked as drafters expect, it might help clients maximize the amount of time they can stay in their own homes in their later years and minimize spending on facility-based long-term care services.