Home Mortgage Interest Credit Act of 2026

This bill creates a new tax credit for homeowners who pay interest on loans used to buy, build, or improve their primary residences. The credit allows taxpayers to directly reduce their federal income tax liability by up to $2,000 annually, or $1,000 for married individuals filing separately, provided their modified adjusted gross income does not exceed specific thresholds that vary by filing status. The amount of the credit is reduced by $20 for every $1,000 that a taxpayer's income exceeds these limits, and the provision includes an automatic inflation adjustment mechanism starting in 2028. This legislation applies to taxable years beginning after December 31, 2026, and excludes nonresident aliens from claiming the benefit.