S. 1940 — READY Accounts Act

This section establishes an above-the-line deduction for cash contributions to a Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) account, up to $4,500 per taxable year (adjusted for inflation after 2026 using a cost-of-living adjustment with calendar year 2025 as the base year and rounded to the next lowest multiple of $50). A READY account is a trust, administered by a bank or approved trustee, holding nonforfeitable assets invested only in permitted vehicles (not life insurance or commingled improperly) exclusively to pay an account beneficiary's qualified home disaster mitigation and recovery expenses for their principal residence. Qualified expenses include (1) specified disaster mitigation measures (e.g., installing impact-resistant windows or entry doors, elevating the home, strengthening roof-to-wall connections) certified by a qualified industry professional as meeting Secretary of the Treasury criteria (developed in consultation with the Federal Emergency Management Agency Administrator) or (2) uncompensated costs to repair principal residence damage from fire, storm, or other casualty; certain IRA rules apply by reference (e.g., no deduction for rollovers, time of contributions).