CT SB01401

Allows Connecticut homeowners to establish disaster savings accounts at financial institutions to cover insurance deductibles and property damage from wildfires, floods, hurricanes, tornadoes, and severe storms affecting single-family residences

Provides state income tax deductions for contributions up to $2,500 for individuals ($5,000 for joint filers) and for interest earned on accounts, available to those with federal adjusted gross income under $100,000 ($200,000 for joint filers)

Creates a 10% employer tax credit starting January 1, 2026 for contributions made to employees' disaster savings accounts, capped at $2,500 per account holder annually

Imposes a 10% civil penalty on withdrawals used for non-eligible expenses, and withdrawn funds become taxable income if previously deducted

Limits individuals to one disaster savings account with one designated qualified beneficiary at a time, with no cap on contribution amounts; accounts may only hold cash or money market funds