Bill > SB1802

This bill creates a new type of savings account in Oklahoma called a "catastrophe savings account" for residents to save for expenses related to natural disasters, referred to as "catastrophic events" like windstorms, tornadoes, earthquakes, floods, and ice storms. Taxpayers can establish one such account per primary residence, which can be a regular savings or money market account, specifically designated for "qualified catastrophe expenses." These expenses include paying a "qualified deductible," which is the amount an insured person pays before their insurance company covers damages from a catastrophic event, or costs for repairing or replacing a primary residence damaged by such an event that are not covered by insurance. The bill sets limits on how much can be contributed to these accounts based on the deductible amount, with higher limits for those with larger deductibles or who are self-insured, up to a maximum of $250,000 or the home's market value. Starting in tax year 2027, Oklahomans can deduct their contributions to these accounts from their state income tax, and any interest or returns earned within the account, as well as distributions used for qualified catastrophe expenses, will be exempt from taxable income, though any excess distributions will be taxed. The Oklahoma Tax Commission is authorized to create rules to implement these provisions, and the law will take effect on January 1, 2027.

Budget and Finance

http://www.oklegislature.gov/BillInfo.aspx?Bill=sb1802&Session=2600