This legislation, known as the Home Savings Act, amends the Internal Revenue Code of 1986 to create a new exclusion from gross income for specific retirement plan distributions. It allows individuals to withdraw funds from their defined contribution plans , annuity plans , individual retirement plans , and 457(b) plans without incurring federal income tax, provided the funds are used for qualified housing expenses. The primary purpose of these distributions must be to cover a down payment or closing costs associated with acquiring a principal residence . This benefit extends not only to the employee or individual account holder but also to an eligible relative , which includes a spouse, child, grandchild, or ancestor of the employee or their spouse. Furthermore, any transfer of these tax-free distributions from an individual to an eligible relative for their principal residence's down payment or closing costs will not be treated as a gift for federal gift tax purposes. This provision is temporary, applying to distributions made in taxable years beginning after December 31, 2025, and concluding for distributions made after December 31, 2030.