NY A10678

Allows individual taxpayers to establish one catastrophe savings account to cover insurance deductibles and self-insured losses from hurricanes, rising floodwaters, or catastrophic windstorm events to their primary residence in New York.

Permits tax deductions for contributions to catastrophe savings accounts and exempts all interest income earned by such accounts from state taxation.

Sets contribution limits based on insurance deductible amount: $2,000 maximum for deductibles under $1,000; up to $15,000 or twice the deductible amount (whichever is less) for deductibles over $1,000; and up to $250,000 for self-insured individuals.

Distributions used for qualified catastrophe expenses (declared by the governor as a state disaster emergency) are excluded from taxable income, but non-qualified distributions are taxable with a 2.5% additional tax penalty unless the taxpayer is age 70 or older.

Protects catastrophe savings accounts from attachment, levy, garnishment, or legal process; allows surviving spouses to inherit accounts tax-free; and becomes effective January 1 following enactment.