Bill > SB01401

This bill establishes a disaster savings account program designed to help homeowners financially prepare for and recover from natural disasters like wildfires, floods, hurricanes, and severe storms. Under the bill, individuals can open a disaster savings account at a financial institution specifically designated for paying insurance deductibles or repairing damage to a single-family residence. Individuals can contribute cash to these accounts without limits, and employers can also contribute. Account holders must designate a qualified beneficiary (a homeowner residing in a single-family residence in Connecticut) and can invest funds in money market funds. The bill provides tax incentives, including a tax deduction for contributions to the account (up to $2,500 for single filers and $5,000 for joint filers), a tax deduction for interest earned on the account, and a tax deduction for qualified withdrawals used to pay disaster-related expenses. Additionally, employers who contribute to their employees' disaster savings accounts can claim a tax credit equal to 10% of their contributions, with a maximum credit of $2,500 per account holder. The program is set to begin for tax years starting on or after January 1, 2025, with the employer tax credit beginning in 2026. To prevent misuse, the bill includes penalties for withdrawing funds for non-eligible purposes and requires detailed reporting to the tax authorities.

Budget and Finance, Business and Industry, Justice

Banking Committee (J)

https://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=SB01401&which_year=2025