H.R. 7584: Multigenerational Family Tax Credit Act of 2026

This bill, known as the Multigenerational Family Tax Credit Act of 2026, aims to provide a tax credit for certain costs associated with adapting homes for multigenerational living. Here is a summary of its main components:

Tax Credit for Multigenerational Housing Expenses

The bill proposes a new tax credit under the Internal Revenue Code for expenses incurred in making a principal residence safer, more accessible, or more mobile for certain family members, referred to as "qualified relatives." This credit is applicable during the taxpayer's taxable year.

Qualified Multigenerational Housing Expenses

Qualified multigenerational housing expenses are defined as any costs that support improvements related to safety, mobility, or accessibility of a taxpayer's main home for qualifying relatives. These expenses must directly relate to the adaptions needed for these individuals.

Qualified Relatives

A "qualified relative" can include individuals who meet the following criteria:

• They share a direct family relationship with the taxpayer or their spouse.
• They are either over the age of 65 or have a disability.
• They have lived in the taxpayer's principal home for more than half of the year.

Credit Limitations

There are several limitations regarding the credit:

• The maximum credit amount is $8,000 per taxable year.
• The credit decreases by $50 for every $1,000 of modified adjusted gross income above $200,000 for single filers or $400,000 for joint filers.

Refundable Portion of the Credit

Fifty percent of the allowed credit can be refundable, meaning it may affect a taxpayer's refund even if they do not owe taxes.

Prevention of Double Benefit

If a taxpayer claims this credit, they cannot claim another tax credit or deduction for the same expense. Additionally, the credit amount will reduce the property's basis for calculating potential future deductions.

Inflation Adjustments

The dollar limitation on the credit will be adjusted for inflation starting in taxable years after 2027, ensuring that the limit remains relevant over time.

Regulations

The Secretary of the Treasury is tasked with creating necessary regulations to implement this provision effectively.

Effective Date

The provisions of this bill will apply to taxable years beginning after December 31, 2026.

Relevant Companies

• PHM (PulteGroup, Inc.): As a builder of homes, this company could see impacts from increased demand for homes that accommodate multigenerational families due to the new tax credit.
• DHI (D.R. Horton, Inc.): Similarly, D.R. Horton might experience increased interest in constructing homes suitable for multigenerational living arrangements.