Substitute Bill No. 1401 establishes disaster savings accounts to assist homeowners in managing costs related to disasters such as wildfires, floods, and severe storms. The bill defines key terms and allows individuals to set up accounts with financial institutions specifically for covering eligible costs like insurance deductibles and damages to single-family residences. It introduces tax deductions and credits for contributions to these accounts, requiring account holders to submit tax returns with relevant information. The bill also outlines penalties for non-eligible withdrawals and grants the Commissioner of Revenue Services the authority to implement regulations for effective management of these accounts.

In addition to provisions for disaster savings accounts, the bill amends section 12-701 of the general statutes to clarify and expand deductions available to taxpayers in Connecticut. Notable insertions include the exclusion of certain income types from gross income calculations, such as Holocaust victims' settlement payments and retirement pay for military members. The bill also introduces deductions for organ donation expenses and financial assistance from the Crumbling Foundations Assistance Fund. Furthermore, it allows for a tax credit for employer contributions to disaster savings accounts, with specific documentation requirements. Overall, the bill aims to provide tax relief and enhance financial support for individuals and families, particularly in times of disaster.

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