House Bill 118 Summary

• Authorizes taxpayers in coastal Mississippi counties (Hancock, Harrison, Jackson, Pearl River, Stone, and George) to establish catastrophe savings accounts to cover insurance deductibles and uninsured losses from hurricanes, flooding, or catastrophic windstorms.

• Excludes contributions to catastrophe savings accounts, interest earned on such accounts, and distributions used for qualified catastrophe expenses from state taxable gross income.

• Limits account contributions based on insurance deductibles: $2,000 for deductibles of $1,000 or less, up to $15,000 for higher deductibles, or $30,000 for self-insured individuals (not to exceed home value).

• Imposes an additional 2.5% state income tax on non-qualified distributions, except for taxpayers no longer owning a coastal residence or those age 70 and older with self-insured accounts.

• Allows taxpayers to deduct insurance premiums paid for hurricane, flood, or windstorm coverage on coastal residences as an adjustment to gross income, effective January 1, 2011.