SMART Savings Act of 2026

This bill changes federal tax law on "prohibited transactions," which are certain dealings between a tax-favored savings account and people connected to it. It narrows the list of accounts covered by the federal excise tax on these transactions to employer plans under sections 401(a) and 403(a). Accounts such as individual retirement accounts (IRAs), health savings accounts, Archer medical savings accounts, and Coverdell education savings accounts would no longer appear in that list. The bill rewrites the IRA rule so that an IRA stops being an IRA, as of the start of the tax year, if the owner or beneficiary uses its income or assets for personal benefit. Receiving reduced-cost, free, or improved products or services based on the account's value or fees would not count as self-dealing. The changes apply to transactions after the bill becomes law.

Full text and official record on Congress.gov

Sponsors

• John Barrasso Republican sponsor
• 2 cosponsors