Bill > AB1726

This bill, effective immediately as a tax levy, aims to encourage financial preparedness for natural disasters by creating "catastrophe savings accounts" for qualified taxpayers in California. For taxable years between 2027 and 2032, individuals can deduct contributions made to these accounts, which are defined as savings or money market accounts specifically set up to cover "qualified catastrophe expenses." These expenses include costs related to damage from declared wildfires, floods, or earthquakes, as well as the homeowner's insurance deductible, and even costs for property-level mitigation efforts to make a home more resilient. The bill also excludes interest earned by these accounts from gross income, meaning it won't be taxed. However, if funds are withdrawn for non-qualified expenses, a penalty will apply. The bill includes specific contribution limits based on whether the taxpayer's home is insured and requires reporting on the program's effectiveness.

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB1726