Senate Bill 2502 Summary

• Authorizes Mississippi taxpayers to establish catastrophe savings accounts to pay insurance deductibles and uninsured losses from hurricanes, floods, windstorms, and other catastrophic events to their primary residences.

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

• Limits account contributions based on insurance deductible amounts: $2,000 for deductibles of $1,000 or less; up to $15,000 (or twice the deductible, whichever is less) for higher deductibles; and up to $350,000 for self-insured individuals.

• Imposes a 2.5% penalty tax on distributions not used for qualified catastrophe expenses, except when the account holder no longer owns a qualifying residence or reaches age 70 for self-insured accounts.

• Protects catastrophe savings account assets from attachment, levy, garnishment, and legal process; effective January 1, 2015.