Capitol Letters: House passes Catastrophic Savings Accounts

State Rep. Megan Jones

Last week, the Iowa House unanimously passed House File 988, which allows Iowans to open tax-free interest-bearing savings accounts to pay for qualified catastrophic expenses.

The bill defines catastrophic events as windstorms, cyclones, earthquakes, ice storms, tornadoes, high winds, flood, hail and major disasters declared by the president or governor that are not normally covered by property casualty insurance.

This bill allows Iowans to save specifically for catastrophic events to help mitigate the financial impact of unexpected disasters. The bill offers tax deductions for contributions made to the account and exempts interest on these accounts from state income tax.

This bill builds on Senate File 619, a disaster assistance bill, signed by the governor last week.

Email: megan.jones@legis.iowa.gov