State Homebuyer Savings Accounts: An Overlooked Tax Break
Unlike a mortgage interest deduction, a First-Time Homebuyer Savings Account is a benefit you claim before you even buy, while you're still saving up. A handful of states let residents open a dedicated account for a future home purchase and deduct their contributions (and sometimes the interest earned) from state taxable income, up to an annual cap that varies by state and filing status. Since every state's program sets its own cap and rules, this calculator asks you to enter your own state's annual deduction limit and tax rate, then shows how much of this year's contribution is deductible and roughly how much it could save you.
How It's Calculated
| Step | Item | Formula |
|---|---|---|
| 1 | Deductible Amount | Lesser of contribution or state cap |
| 2 | Tax Savings | Deductible amount × state tax rate |
| 3 | Remaining Room | State cap − contribution |
Frequently Asked Questions
Several states, including Colorado, Minnesota, Oregon, Virginia, Montana, and Mississippi, offer a version of this deduction. Caps and eligible uses vary, so check your state's exact rules.
No, this is a state-level benefit only. This calculator estimates state tax savings, not federal.
※ Reference estimate only. Contribution caps, eligibility, and rates vary by state and can change — confirm your state's current program rules.