SB343 Summary

• Establishes the Homeowner's Insurance Catastrophic Event Planning Act by amending Sections 40-18-311 and 40-18-312 of the Alabama Code.

• Increases the tax deduction for catastrophe savings account contributions from one times to two times the amount contributed, with interest income from the account exempt from state income tax.

• Sets contribution limits based on homeowner's insurance deductible: up to $4,000 per year and $12,000 total for those with deductibles of $1,000 or less; up to $15,000 total or twice the deductible (whichever is less) for those with higher deductibles; and up to $250,000 for self-insured individuals.

• Allows distributions for qualified catastrophe expenses to be excluded from income tax, but imposes a 2.5% additional tax on taxable distributions unless the taxpayer no longer owns a qualified residence or the distribution is from a self-insured account after age 70.

• Effective for tax years beginning on or after January 1, 2014.