Congressman Ted Poe (TX-02) announced he cosponsored H.R. 4836, the Catastrophe Savings Accounts Act of 2006. This bill will allow citizens to put money in a personal tax-exempt savings account that can be used to pay expenses that result from a presidentially declared major disaster. After last seasons hurricanes, too many people were left trying to make ends meet, said Poe. Predictions have the Gulf Coast a likely target for the next several years, it is important that we are all prepared financially. This bill will allow taxpayers to sock away pre-taxed money to meet deductibles in the event of another devastating storm.

The Catastrophe Savings Account Act of 2006 includes the following provisions:
  • Creates tax-exempt Catastrophe Savings Accounts (CSA)
  • Allows tax-free distributions from a CSA to pay expenses resulting from a presidentially declared major disaster
  • Limits CSA balances to: (1) $2,000 if you have a homeowners insurance deductible of $1,000 or less; and (2) $15,000 or twice a homeowner's insurance deductible for individuals with deductibles of more than $1,000 (Example: If the homeowners deductible is $5,000, they are allowed to save up to $10,000. People with deductibles $7,500 or higher can still save up to $15,000 and take $7,500 out tax-free to apply towards their deductible.)
For more information on HR 4836, please visit http://thomas.loc.gov/.

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