H.R. 9555: Home Mortgage Interest Credit Act of 2026

This bill would create a new federal tax credit for certain mortgage interest paid on a taxpayer’s main home.

What the credit would do

Under the bill, eligible taxpayers could claim a credit equal to the amount of qualified residence interest they paid or accrued during the tax year. In simple terms, this is mortgage interest on a home loan used to:

• buy a home,
• build a home,
• make substantial improvements to a home, or
• refinance that kind of loan, up to the amount of the original loan.

The home must be the taxpayer’s principal residence, meaning their main home.

Limits on the credit

• The credit would be capped at $2,000 per year for most taxpayers.
• Married people filing separate returns would have a cap of $1,000 each.
• If more than one unmarried person owns and lives in the same home, the credit would be divided among them, but the total for all of them together could not exceed $2,000.

Income-based reduction

The credit would be reduced for higher-income taxpayers. It would go down by $20 for every $1,000 of modified adjusted gross income above certain thresholds:

• $300,000 for joint filers and surviving spouses,
• $200,000 for head of household filers, and
• $150,000 for other taxpayers.

“Modified adjusted gross income” generally means adjusted gross income with some foreign income exclusions added back in.

No double tax benefit

A taxpayer could not also claim a separate deduction or another credit for the same mortgage interest if that interest is already being used for this new credit.

Inflation adjustment

Starting after 2027, the dollar limits in the bill would be adjusted for inflation each year.

Who would not qualify

Nonresident aliens would not be eligible for the credit.

When it would start

The new credit would apply to tax years beginning after December 31, 2026.

Relevant Companies

None found