Bill > S07264

This bill establishes catastrophe savings accounts (CSAs) as a tax-advantaged financial tool for homeowners to save money for expenses related to natural disasters like hurricanes and flooding. Specifically, individuals can open a single savings or money market account to cover insurance deductibles or self-insured losses for their primary residence. Contributions to these accounts are tax-deductible, and the interest earned is tax-exempt. The bill sets contribution limits based on an individual's insurance deductible: up to $2,000 for deductibles under $1,000, up to $15,000 or twice the deductible for higher deductibles, and up to $250,000 for self-insured individuals. Withdrawals are tax-free if used for qualified catastrophe expenses, which are defined as expenses from a disaster declared a state emergency by the governor. If funds are withdrawn for non-qualifying purposes before age 70, a 2.5% additional tax applies. The account is protected from legal processes like garnishment, and upon the death of the account holder, the account's disposition depends on whether the surviving spouse inherits it. The bill will take effect on the first day of January following its enactment.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/S7264