Substitute Bill No. 1401 establishes disaster savings accounts to assist homeowners in managing costs related to disasters like wildfires and floods. The bill allows individuals to create these accounts with financial institutions, which can be used exclusively for eligible costs such as insurance deductibles and damages to single-family residences. Key provisions include the ability for account holders to jointly establish accounts, designate beneficiaries, and contribute without limits. The bill also introduces tax deductions and credits for contributions to these accounts, while imposing penalties for non-eligible withdrawals, with exceptions for circumstances like the account holder's death or disability. The Commissioner of Revenue Services is empowered to adopt regulations to implement these provisions.

In addition to the disaster savings accounts, the bill amends section 12-701 of the general statutes to simplify the calculation of Connecticut adjusted gross income for tax purposes. It introduces new subtractions from gross income, including federally exempt income such as certain dividends and Social Security benefits, while repealing outdated provisions. The bill also outlines a phased approach to the taxation of retirement income and provides deductions for specific expenses, including those related to organ donation and financial assistance for crumbling foundations. Furthermore, it offers tax credits for employer contributions to disaster savings accounts, with specific eligibility criteria and documentation requirements. Overall, the bill aims to provide financial support and tax relief to individuals and families, particularly in the context of disaster preparedness and recovery.

Statutes affected:
Raised Bill: 12-701
BA Joint Favorable Substitute: 12-701
File No. 293: 12-701
JUD Joint Favorable: 12-701
FIN Joint Favorable: 12-701