Multigenerational Family Tax Credit Act of 2026

Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 25F the following new section:

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the aggregate amount of qualified multigenerational housing expenses paid or incurred by the taxpayer during such taxable year.

The credit allowed under subsection (a) to any taxpayer for any taxable year shall not exceed $8,000.

The amount of the credit allowed under subsection (a) for any taxable year shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds $200,000 ($400,000 in the case of a joint return). For purposes of the preceding sentence, the term modified adjusted gross income means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.

For purposes of this section—

The term qualified multigenerational housing expenses means, with respect to any taxpayer, any expenses which are directly related to improving the safety, mobility, or accessibility of the principal residence of the taxpayer for purposes of supporting any qualified relative of such taxpayer.

The term qualified relative means, with respect to any taxpayer for any taxable year, an individual—

(i) who bears a relationship described in subparagraph (B) to such taxpayer or to such taxpayer’s spouse,

(ii) who—

(I) has attained age 65 as of the last day of such taxable year, or

(II) is disabled (within the meaning of section 72(m)(7)), and

(iii) who has the same principal place of abode as such taxpayer for more than one-half of such taxable year.

For purposes of subparagraph (A), a relationship described in this subparagraph is a relationship described in subparagraph (B), (C), (D), (F), or (G) of section 152(d)(2), except that only a father-in-law, mother-in-law, brother-in-law, or sister-in-law shall be taken into account for purposes of subparagraph (G) thereof.

The term principal residence has the same meaning as when used in section 121.

Fifty percent of so much of the credit allowed under subsection (a) (determined after application of subsection (b) and without regard to this subsection and section 26(a)) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)).

In the case of any qualified multigenerational housing expenses with respect to which credit is allowed under subsection (a)—

(1) no other credit or deduction shall be allowed for, or by reason of, any such expense to the extent of the amount of such credit, and

(2) the basis of any property shall be reduced by the amount of such credit to the extent that such expenses were taken into account in determining such basis.

In the case of any taxable year beginning after 2027, the dollar amount in subsection (b)(1) shall be increased by an amount equal to—

(1) such dollar amount, multiplied by

(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2026 for calendar year 2016 in subparagraph (A)(ii) thereof.

If any increase under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100.

The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section.

(1) Section 1324(b)(2) of title 31, United States Code, is amended by inserting 25G, after 25A,.

(2) Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting, 25G by reason of subsection (d) thereof before, 32.

(3) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25F the following new item:

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.