Georgia CommonsHouse · Passed · 2025-2026 Regular Session
HB 511: Insurance; deductions from taxable income for contributions by taxpayers to catastrophe savings accounts and interest earned on such accounts; provide
Last action July 1, 2025 · Effective Date
House Bill 511 would let Georgia homeowners open tax-advantaged savings accounts to cover hurricane, tornado, and other disaster-related expenses, with contributions and interest exempt from state income tax.
The summaries below were written by an AI model (claude-sonnet-5) from the text of the bill and are not part of it. Quote the text, not the summary. The stored text is the Enrolled version, the latest the General Assembly's website lists.
In plain language
Georgia currently has no dedicated tax break for homeowners setting aside money to cover storm or disaster damage. This bill creates a new type of account, called a catastrophe savings account, that residents can open at a bank to pay for expenses tied to declared disasters like hurricanes, tornadoes, hailstorms, and floods. Taxpayers could deduct contributions to the account from their state income tax, and interest earned in the account would not be taxed. Contribution limits depend on the homeowner's insurance deductible: up to $2,000 for those with deductibles of $1,000 or less, up to twice the deductible (capped at $25,000) for higher deductibles, and up to $250,000 for self-insured homeowners who choose not to carry insurance, though never more than the home's market value. Withdrawals used for storm-related repairs or deductibles stay tax-free; other withdrawals and excess contributions get taxed as income. Only one account per primary residence is allowed. The law would take effect July 1, 2025, applying to tax years starting in 2026.
What the bill does
- Creates a new state income tax deduction for money a Georgia homeowner contributes to a catastrophe savings account.
- Exempts interest earned inside a catastrophe savings account from Georgia income tax.
- Sets contribution caps tied to a homeowner's insurance deductible: $2,000, twice the deductible up to $25,000, or up to $250,000 for self-insured homeowners.
- Requires withdrawals not used for storm-related repairs or deductibles to be counted as taxable income.
- Taxes excess contributions above the allowed limit as income in the year they are withdrawn.
- Directs the Department of Revenue to write rules to administer the accounts.
Who it affects
Georgia homeowners who want to save for disaster-related repair costs, particularly in areas prone to hurricanes, tornadoes, hailstorms, or flooding; self-insured homeowners who forgo insurance; surviving spouses and heirs who inherit these accounts; and the Georgia Department of Revenue, which must write implementing rules.
Why it matters
Homeowners in storm-prone parts of Georgia could set aside money for deductibles or uninsured repair costs without paying state income tax on contributions or interest, potentially easing the financial burden after a declared disaster like a hurricane or tornado, while reducing state tax revenue.
Key provisions
- New Code Section 48-7-28.5(a) defines a catastrophe savings account, a catastrophic event (requires a gubernatorial disaster or emergency declaration), and a qualified deductible.
- Subsection (b) limits each taxpayer to one catastrophe savings account per primary residence.
- Subsection (c) sets contribution caps: $2,000 for deductibles of $1,000 or less, twice the deductible up to $25,000 for higher deductibles, and up to $250,000 for self-insured homeowners, capped at the home's fair market value.
- Subsection (d) allows a tax deduction for contributions, exempts account interest from tax, and excludes qualifying withdrawals from taxable income.
- Subsection (e) requires excess contributions to be withdrawn and taxed as income, and addresses tax treatment of the account when the owner dies.
- Subsection (f) directs the Department of Revenue to issue rules and regulations to implement the accounts.
- Section 2 sets the effective date as July 1, 2025, applying to taxable years beginning on or after January 1, 2026.
From the bill
“'Catastrophe savings account' means a regular savings account or money market account established by a resident taxpayer to pay for qualified catastrophe expenses.”
“For a self-insured taxpayer who chooses not to obtain insurance on his or her primary residence, the total amount that may be contributed to a catastrophe savings account shall not exceed $250,000.00”
Status timeline
- Effective Date
- Act 269
- House Date Signed by Governor (House)
- House Sent to Governor (House)
- Senate Passed/Adopted (Senate)
- Senate Third Read (Senate)
- Senate Taken from Table (Senate)
- Senate Tabled (Senate)
Show full history (18 actions)
- Senate Engrossed (Senate)
- Senate Read Second Time (Senate)
- Senate Committee Favorably Reported (Senate)
- Senate Read and Referred (Senate)
- House Passed/Adopted By Substitute (House)
- House Third Readers (House)
- House Committee Favorably Reported By Substitute (House)
- House Second Readers (House)
- House First Readers (House)
- House Hopper (House)
Sponsors
- Eddie Lumsden (R, HD-12)
- Shaw Blackmon (R, HD-146)
- Noel Williams, Jr. (R, HD-148)
- James Burchett (R, HD-176)
- Matt Hatchett (R, HD-155)
- Brian Prince (D, HD-132)
- Larry Walker, III (R, SD-20)
Votes
- House voteMarch 6, 2025
177 yea, 0 nay (1 not voting, 2 excused)
- Senate voteMarch 31, 2025
30 yea, 20 nay (5 not voting, 1 excused)
- Senate voteMarch 31, 2025
54 yea, 0 nay (0 not voting, 2 excused)
Topics
- income tax deductions
- homeowners insurance
- disaster preparedness
- property taxes and savings
- hurricane and storm damage