Natural disasters: catastrophe savings accounts: personal income tax.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Appropriations
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill creates a tax deduction for contributions made to ‘catastrophe savings accounts’ established by California residents. Qualified taxpayers can deduct these contributions from their adjusted gross income, up to a maximum of $15,000 for homeowners with insurance or $250,000 for those without. The bill also allows interest earned in these accounts to be excluded from gross income and imposes a penalty for using funds from the account for non-disaster-related expenses. It includes reporting requirements to assess the program’s effectiveness.
Key provisions
- Allows a deduction from adjusted gross income for contributions to catastrophe savings accounts.
- Defines ‘catastrophe savings account’ with specific requirements for financial institutions.
- Limits annual contributions to $15,000 for insured homeowners and $250,000 for uninsured homeowners.
- Excludes interest earned in catastrophe savings accounts from gross income.
- Imposes a 2.5% penalty for using funds for non-qualified catastrophe expenses.
- Includes findings and reporting requirements to evaluate the program’s impact.
- Sets a sunset date of December 1, 2032, for the provisions of the bill.
Who is affected
- California taxpayers
- Homeowners
- Financial institutions
- The Franchise Tax Board
Notable changes
Bill text
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Sponsors
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1 on record
Primary sponsor
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