H.R. 9978: Homeowners Premium Tax Reduction Act of 2026

This bill would create a new federal income tax deduction for some homeowners insurance costs.

What the deduction would cover

• Individual taxpayers could deduct qualified homeowners insurance premiums paid or incurred during the year.
• The deduction would be limited to up to $10,000 per year.
• The premiums must be for homeowners insurance on the taxpayer’s principal residence—in other words, their main home.

How it would work on taxes

• The bill says this deduction would be an “above-the-line” deduction.
• That means it would be subtracted when calculating adjusted gross income (AGI), which can affect eligibility for other tax benefits and the size of taxable income.
• The Internal Revenue Code would be amended to add this new deduction and update the list of tax provisions accordingly.

When it would apply

• The change would apply to taxable years ending after the date the bill is enacted.
• So once enacted, the deduction would generally be available starting with the next applicable tax year for taxpayers filing returns for periods after enactment.

Relevant Companies

• None found