GA homeowners can save for storms and get a tax break for it, new law says. How it works

A new Georgia law gives homeowners a way to save for natural disasters and get a state tax break for doing it. Georgia taxpayers contribute directly, themselves, out of pocket, just like a regular savings account.

House Bill 511 took effect in January and creates tax-advantaged “catastrophe savings accounts” (CSA) that work a lot like a health savings account, but for your insurance deductible and disaster repair costs.

What is a catastrophe savings account (CSA)?

The law creates a type of savings account for natural disaster costs.

Features:

• Tax-deductible
• Interest earned is tax-exempt
• Withdrawals are not counted as taxable income

The savings are only triggered when things get catastrophic and has been declared a disaster or emergency by the Governor.

Events covered:

• Windstorms
• Cyclones
• Earthquakes
• Hurricanes
• Ice storms
• Tornadoes
• High winds
• Floods
• Hail storms

Who is eligible?

This account is for individuals who want a financial cushion before bad weather or damaging storms.

Eligibility:

• Georgia resident taxpayers
• One account per primary residence
• Covers your primary residence only
• Rental properties or vacation homes are not covered
• Self-insured taxpayers (those who choose not to carry homeowner’s insurance)

Are there limits to the account?

How much you can contribute depends on your insurance deductible.

• $1,000 or less deductible; the contribution cap is $2,000
• $1,000 or more; twice your deductible, maxing out at $25,000
• Self-insured homeowners can contribute up to $250,000, but not more than the fair market value of the home
• If your policy has multiple deductibles, the highest one is used to calculate your cap

Qualified expenses:

• Paid deductible after a covered catastrophic event
• Uninsured repair or replacement costs for damage to primary residence

How do you use it?

The account itself is much like a regular savings account and is pretty straightforward, but it does require some setup.

The process:

• Open a regular savings account or money market
• Label it as a catastrophe savings account, specifying its purpose
• Contribute what you can up to your limit
• Deduct it on your Georgia state income taxes

Withdrawals:

• Qualified expenses are tax-free
• If you over-contribute and claimed a deduction, you must withdraw the excess and report it as income that year
• If the account owner dies, the balance is treated as taxable income for whoever inherits it
• Surviving spouses can maintain the account tax-free until their own death

The major thing to remember about a CSA is that you must list it on your Georgia income tax forms (Form 500) using the designated schedules or codes.

This story was originally published May 21, 2026 at 6:00 AM with the headline "GA homeowners can save for storms and get a tax break for it, new law says. How it works."