Home Mortgage Interest Credit Act of 2026

This bill amends the Internal Revenue Code of 1986 to introduce a new tax credit for qualified residence interest paid or accrued by taxpayers. This credit specifically applies to interest on acquisition indebtedness , which includes debt incurred for acquiring, constructing, or substantially improving a taxpayer's principal residence, or refinancing such debt. The determination of whether a property is a qualified residence is made at the time the interest accrues. The credit is subject to several limitations, including a dollar limitation of $2,000 per taxable year, reduced to $1,000 for married individuals filing separately. Additionally, the credit is subject to an income-based phase-out , where it is reduced for taxpayers whose modified adjusted gross income exceeds specified thresholds, such as $300,000 for joint filers. To prevent double benefits, no other credit or deduction is allowed for interest taken into account for this new credit, and the dollar amounts will be adjusted for inflation in future years. The provisions of this bill will take effect for taxable years beginning after December 31, 2026.