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

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.

• 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• Taxes excess contributions above the allowed limit as income in the year they are withdrawn.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.

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.

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.

• 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.

1. 2025-05-14Effective Date 2025-07-01
2. 2025-05-14Act 269
3. 2025-05-14House Date Signed by Governor (Cámara de Representantes)
4. 2025-04-07House Sent to Governor (Cámara de Representantes)
5. 2025-03-31Senate Passed/Adopted (Senado)
6. 2025-03-31Senate Third Read (Senado)
7. 2025-03-31Senate Taken from Table (Senado)
8. 2025-03-31Senate Tabled (Senado)

• Eddie Lumsden (R, HD-012)Patrocinador principal
• Shaw Blackmon (R, HD-146)
• Noel Williams (R, HD-148)
• James Burchett (R, HD-176)
• James Hatchett (R, HD-155)
• Brian Prince (D, HD-132)
• Larry Walker (R, SD-020)

1. AprobadaVotación: Cámara de Representantes6 de marzo de 2025

   177 a favor, 0 en contra (1 sin votar, 2 ausentes)

   Passage: House Vote #234

2. AprobadaVotación: Senado31 de marzo de 2025

   30 a favor, 20 en contra (5 sin votar, 1 ausentes)

   Motion To Engross: Hb 144, Hb 153, Hb 511: Senate Vote #340

3. AprobadaVotación: Senado31 de marzo de 2025

   54 a favor, 0 en contra (0 sin votar, 2 ausentes)

   Passage: Senate Vote #367

• income tax deductions
• homeowners insurance
• disaster preparedness
• property taxes and savings
• hurricane and storm damage