A bill for an act creating a catastrophic savings account and modifying individual income taxes for account holders and including applicability provisions.

House File 622 establishes the "Catastrophic Savings Account Act" in Iowa, allowing residents to create special interest-bearing savings accounts beginning January 1, 2026. The bill permits account holders to deduct contributions and interest earned from their state individual income tax, up to specific lifetime limits based on their homeowner's insurance premium or home value. Funds from these accounts can be used for "qualified catastrophic expenses," which include deductibles for homeowner's insurance policies covering events like floods or windstorms, or declared natural disasters. Withdrawals for non-qualified expenses are added back to taxable income and may incur a penalty.