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SB 1401 Connecticut Senate · 2025 Regular Session

AN ACT ESTABLISHING DISASTER SAVINGS ACCOUNTS AND A RELATED TAX DEDUCTION AND CREDIT.

SB 1401 creates "Disaster Savings Accounts" that allow homeowners to save money specifically for costs related to qualifying disasters like wildfires, floods, or hurricanes. Homeowners (as "qualified beneficiaries") who live in single-family residences can use these accounts to pay insurance deductibles or repair damage to their homes. Account holders (including the homeowner or joint account holders) can contribute unlimited funds, with tax deductions for contributions and a separate tax credit. The bill requires account holders to submit tax forms detailing contributions and withdrawals for eligible disaster-related expenses, while prohibiting financial institutions from tracking how funds are used.
Issues: ✓ Budget & TaxesSupports Budget & TaxesProvides tax deductions and credits for disaster savings accounts, offering direct tax relief to homeowners, directly advancing tax policy.90% confidence
Bill status in committee 1 of 4 stages cleared
Introduction
Feb 2025
Committee Review
Floor Vote
Governor
Introduced Feb 27, 2025 Last action May 13, 2025
Maddy AI version diff · 1 comparison

What changed between versions

Raised Bill → BA Joint Favorable Substitute · 6 edits
MODERATE
This bill was revised to expand the definition of eligible disaster costs to include direct loss or damage to single-family residences, not just insurance deductibles. The bill also broadened the definition of financial institutions to include credit unions and third-party providers, and updated the section of the general statutes where deductions apply. These changes make the disaster savings account program more accessible and comprehensive for Connecticut residents affected by various natural disasters.
Scope change
The scope of eligible costs was expanded to include direct property damage, and the scope of participating financial institutions was broadened to include credit unions and affiliates.
ELIGIBILITY

Eligible costs now include direct loss or damage to a single-family residence caused by wildfire, flood, rain, hurricane, tornado, or other severe storm, in addition to insurance deductibles.

DEFINITION

The definition of 'financial institution' was expanded to include Connecticut credit unions, federal credit unions, out-of-state credit unions, and their affiliates or third-party providers.

The definition of 'single-family residence' was clarified to specifically reference existing state statutes for mobile manufactured homes, cooperatives, common interest communities, and condominiums.

REQUIREMENT

The bill now requires financial institutions to designate an account as a disaster savings account when it is opened by an account holder, whereas previously they were not required to do so.

The form submission requirements were updated to reference specific new subparagraphs (B)(xxxvi) and (B)(xxxvii) of subdivision (20) of subsection (a) of section 12-701 of the general statutes.

Added a requirement that account holders designate a qualified beneficiary no later than April 15th of the taxable year following the year the account was established.

Floor votes

How they voted

No floor votes recorded yet.
Full legislative history

Actions timeline

Total actions
22
Key actions
4
Committee
5
May 12, 2025
Upper · Passed
Joint Favorable
upper
May 8, 2025
Upper · Passed
IMMEDIATE TRANSMITTAL TO COMMITTEE
upper
May 6, 2025
Upper · Passed
Joint Favorable
upper
Mar 11, 2025
Upper · Passed
Joint Favorable Substitute
upper
Feb 27, 2025
Committee
REF. TO JOINT COMM. ON Banking
upper
0 primary · 0 co-sponsors

Sponsors

No sponsor information available.