In January, Georgia House Bill 511 took effect, allowing homeowners to open Catastrophe Savings Accounts (CSA). This tax-advantaged account is a designated savings account for insurance deductibles and disaster repair costs. The account works much like a Health Savings Account (HSA) except for disaster related expenses.
The tax advantages include:
- Tax Deductible contributions
- Interest Earned is tax exempt
- Withdraws are not counted as taxable income (for expenses related to triggering events, more information below)
Of course, as with any tax-advantaged account, there are rules for the account and a limit on contributions. The guidelines are pretty straightforward.
- All Georgia resident taxpayers are eligible
- One account per primary residence (rental and vacation homes not covered by CSA)
- The contribution limit is dependent on your insurance deductible
- $1000 or less deductible, contribution cap is $2000
- More than $1000 deductible, your contribution cap is twice your deductible up to $25,000
- Self-Insured homeowners can contribute up to $250,000 (but not more than fair market value of the home)
- Use of CSA funds is only triggered when the governor declares a state of emergency due to certain events. These events include hurricanes, tornados, flooding, high winds, windstorms, cyclones, earthquakes, hailstorms, and ice storms.
Some states that were early adopters have banks that offer accounts specified as CSA’s. I have yet to find any Georgia banks offering this account. However, you can open the account at your bank of choice, but it does require some set up.
- Open a new savings or money market account.
- Label it as a “Catastrophe Savings Account”
- Contribute what you can up to your limit
- Deduct it on your state income taxes
I will be keeping an eye out for any news or updates on the Catastrophe Savings Accounts. Please let me know if you have any questions or would like to discuss CSA’s further.
Sources: legis.ga.gov/api/legislation/document/20252026/232912; ledger-enquirer.com, May 21, 2026; wtoc.com, January 2, 2026
The information in this material is not intended as tax or legal advice and may not be used for the purpose of avoiding any federal tax penalties. So, please consult legal or tax professionals for specific information regarding your individual situation.