---
title: HB 511. Insurance; deductions from taxable income for contributions by taxpayers to catastrophe savings accounts and interest earned on such accounts; provide
collection: bills
id: 2025-2026/hb511
cite_as: HB 511, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb511
md_url: https://georgiacommons.org/bills/2025-2026/hb511.md
text_url: https://georgiacommons.org/bills/2025-2026/hb511/text
source_url: https://www.legis.ga.gov/legislation/70484
date: 2025-05-14
status: passed
corpus_version: bills-2026-08-28
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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index: https://georgiacommons.org/bills/index.md
omitted: votes and history
omitted_chars: 1269
omitted_url: https://georgiacommons.org/bills/2025-2026/hb511.md?full=1
bill_number: HB 511
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2025-05-14
last_action: Effective Date 2025-07-01
sponsors:
  - Eddie Lumsden
  - Shaw Blackmon
  - Noel Williams
  - James Burchett
  - James Hatchett
  - Brian Prince
  - Larry Walker
text_version: Enrolled
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB511/2025
upstream_id: 1976331
summaries_model: claude-sonnet-5
topic_tags:
  - income tax
  - homeowners insurance
  - disaster preparedness
  - tax deductions
  - savings accounts
---

# HB 511. Insurance; deductions from taxable income for contributions by taxpayers to catastrophe savings accounts and interest earned on such accounts; provide

## Text

25 LC 50 1210S/AP
House Bill 511 (AS PASSED HOUSE AND SENATE)
By: Representatives Lumsden of the 12 th, Blackmon of the 146 th, Williams of the 148 th,
Burchett of the 176th, Hatchett of the 155th, and others
A BILL TO BE ENTITLED
AN ACT
To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1
relating to income tax imposition, rate, computation, exemption s, and credits, so as to2
provide for tax advantaged catastrophe savings accounts; to establish limits for contributions3
to and withdrawals from such accounts; to provide for tax treatment of contributions, interest,4
and withdrawals; to provide for definitions; to provide for rules and regulations; to provide5
for related matters; to provide for an effective date and appli cability; to repeal conflicting6
laws; and for other purposes.7
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8
SECTION 1.9
Article 2 of Chapter 7 of Title 48 of the Official Code of Geor gia Annotated, relating to10
income tax imposition, rate, computation, exemptions, and credits, is amended by adding a11
new Code section to read as follows:12
"48-7-28.5.13
(a) As used in this Code section, the term:14
(1) 'Catastrophe savings account' means a regular savings acco unt or money market15
account established by a resident taxpayer to pay for qualified catastrophe expenses.16
H. B. 511
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25 LC 50 1210S/AP
(2) 'Catastrophic event' means windstorms, cyclones, earthquakes, hurricanes, ice storms,17
tornadoes, high winds, floods, hail storms, and any other weather events or occurrences,18
provided that such event or occurrence has been declared as a disaster or emergency by19
the Governor.20
(3) 'Qualified catastrophe expenses' means:21
(A) A qualified deductible paid for damage resulting from a catastrophic event; and22
(B) Expenses incurred in repairing or replacing damage to a ta xpayer's primary23
residence as a result of a catastrophic event that are not cove red by a homeowner's24
insurance policy.25
(4) 'Qualified deductible' means the deductible for the homeowner's insurance policy of26
the taxpayer covering catastrophic event damage for his or her primary residence. If such27
policy provides for more than one deductible, the deductible wi th the highest amount28
shall constitute the qualified deductible.29
(b) A taxpayer may establish one catastrophe savings account p ursuant to this Code30
section which shall be labeled as a catastrophe savings account and shall specify that the31
purpose of the account is to cover qualified catastrophe expens es. No more than one32
catastrophe savings account pursuant to this Code section shall be established for a primary33
residence.34
(c)(1) For a taxpayer whose qualified deductible is $1,000.00 or less, the total amount35
that may be contributed to a catastrophe savings account shall not exceed $2,000.00.36
(2) For a taxpayer whose qualified deductible is greater than $1,000.00, the total amount37
that may be contributed to a catastrophe savings account shall not exceed the lesser of38
twice the amount of the taxpayer's qualified deductible or $25,000.00.39
(3) For a self-insured taxpayer who chooses not to obtain insurance on his or her primary40
residence, the total amount that may be contributed to a catastrophe savings account shall41
not exceed $250,000.00; provided, however, that in no case shall the amount contributed42
H. B. 511
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25 LC 50 1210S/AP
to the catastrophe savings account exceed the fair market value of the taxpayer's primary43
residence.44
(d)(1) An individual taxpayer shall be allowed a deduction fro m the tax imposed45
pursuant to this article for amounts contributed to a catastrop he savings account in46
accordance with this Code section.47
(2) All interest income earned by a catastrophe savings account in compliance with this48
Code section shall be exempt from the tax imposed pursuant this article.49
(3) A distribution from a catastrophe savings account shall be included in the income of50
the taxpayer unless the amount of the distribution is used to cover qualified catastrophe51
expenses; provided, however, that no such amount shall be included in the income of the52
taxpayer if the qualified catastrophe expenses of the taxpayer during the taxable year are53
equal to or greater than the aggregate distributions from such account during the taxable54
year. If the aggregate distributions during the taxable year from such account exceed the55
qualified catastrophe expenses of the taxpayer during the taxab le year, the amount56
otherwise included in the taxpayer's income shall be reduced by the amount of the57
distributions for qualified catastrophe expenses and the amount of interest income earned58
by the catastrophe savings account.59
(e)(1) If a taxpayer contributes in excess of the limits provided in this Code section and60
claimed a deduction pursuant to subsection (d) of this Code sec tion, the taxpayer shall61
withdraw the amount of the excess contributions and include that amount in the income62
of the taxpayer in the year of withdrawal.63
(2) If a taxpayer who owns a catastrophe savings account dies, his or her account shall64
be included in the income of the person who receives the account, unless that person is65
the surviving spouse of the taxpayer. Upon the death of such a surviving spouse, the66
amount in the account shall be included in the income of the pe rson who receives the67
account.68
H. B. 511
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25 LC 50 1210S/AP
(f) The department shall promulgate any rules and regulations necessary to implement and69
administer the provisions of this Code section."70
SECTION 2.71
This Act shall become effective on July 1, 2025, and shall be a pplicable to taxable years72
beginning on or after January 1, 2026.73
SECTION 3.74
All laws and parts of laws in conflict with this Act are repealed.75
H. B. 511
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## Summaries written by Georgia Commons

The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.

House Bill 511 would let Georgia homeowners open tax-advantaged catastrophe savings accounts to cover insurance deductibles and storm damage costs, with contributions and account interest exempt from state income tax.

### Plain-language summary

Georgia law currently has no dedicated savings vehicle for homeowners to set aside money for storm and disaster related expenses. This bill creates one by adding a new Code section (O.C.G.A. § 48-7-28.5) letting a resident taxpayer open a single 'catastrophe savings account' per primary residence to pay for a homeowner's insurance deductible or for damage from a declared catastrophic event that insurance does not cover.
Contribution limits depend on the size of the taxpayer's insurance deductible: up to $2,000 for those with a deductible of $1,000 or less, up to twice the deductible (capped at $25,000) for larger deductibles, and up to $250,000 (capped at the home's fair market value) for self-insured homeowners with no coverage. Contributions and interest earned are deducted from or exempt from state income tax, though withdrawals not used for qualified expenses count as taxable income, and excess contributions must be withdrawn and taxed. The law would take effect July 1, 2025, applying to tax years starting on or after January 1, 2026.

### What it does

- Creates a new state income tax deduction for money a Georgia taxpayer puts into a dedicated catastrophe savings account for their primary residence.
- Exempts interest earned on catastrophe savings accounts from Georgia income tax.
- Sets contribution caps tied to the size of a homeowner's insurance deductible, ranging from $2,000 up to $25,000, or $250,000 for self-insured homeowners.
- Requires that withdrawals not spent on qualified catastrophe expenses (deductibles or uncovered storm damage repairs) be counted as taxable income.
- Requires taxpayers who over-contribute beyond the limits to withdraw the excess and pay tax on it in the year of withdrawal.
- Directs the Georgia Department of Revenue to write rules to administer the new accounts.

### Who it affects

Georgia homeowners, especially those in areas prone to hurricanes, tornadoes, hail, or flooding, who want to save for insurance deductibles or uninsured storm damage; self-insured homeowners without coverage; and the Georgia Department of Revenue, which must administer the accounts and set rules.

### Why it matters

Homeowners who open these accounts could reduce their state taxable income while building savings specifically earmarked for storm or disaster related costs, potentially easing the financial hit of a high insurance deductible or uncovered damage after events like hurricanes or tornadoes declared as disasters by the Governor.

### Key provisions

- Section 1 adds O.C.G.A. § 48-7-28.5, defining 'catastrophe savings account,' 'catastrophic event,' 'qualified catastrophe expenses,' and 'qualified deductible.'
- Subsection (b) limits each taxpayer to one catastrophe savings account per primary residence, labeled specifically for that purpose.
- Subsection (c) sets tiered contribution limits: $2,000 for deductibles of $1,000 or less, twice the deductible up to $25,000 for larger deductibles, and up to $250,000 (capped at home value) for self-insured owners.
- Subsection (d) allows a deduction for contributions, exempts account interest from tax, and taxes distributions not used for qualified catastrophe expenses.
- Subsection (e) requires taxation of excess contributions upon withdrawal and addresses how account balances are taxed if 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.

## Status

- Status: Passed (2025-05-14)
- Last action: Effective Date 2025-07-01 (2025-05-14)
- Sponsors: Eddie Lumsden, Shaw Blackmon, Noel Williams, James Burchett, James Hatchett, Brian Prince, Larry Walker
- Official page: https://www.legis.ga.gov/legislation/70484

> The history, votes, and amendments (1,269 characters) are at https://georgiacommons.org/bills/2025-2026/hb511.md?full=1