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

This bill creates Iowa's "Catastrophic Savings Account Act," allowing residents to deduct contributions to special savings accounts from their state income taxes. Account holders can deduct contributions up to specific lifetime limits based on their homeowner insurance premiums (e.g., $2,000 for low-premium policies, $15,000 or twice premiums for higher ones, or $350,000 for self-insured homeowners). Withdrawals for non-qualified purposes (like general expenses) trigger a 2.5% penalty or require adding the amount back to taxable income. The accounts specifically cover costs related to qualifying disasters (e.g., floods, windstorms) or insurance deductibles, with special rules for death, homestead sales, or changing financial institutions.