New READY Accounts: Tax Relief for Home Disaster Preparedness.
This act introduces new savings accounts, READY accounts, allowing tax deductions for contributions aimed at preparing homes for natural disasters or covering post-disaster repair costs. This enables citizens to save for essential housing safety expenses while reducing their income tax. Funds from the account can be used for specific measures like roof reinforcement or impact-resistant window installation, as well as for repairs not covered by insurance.
Key points
Ability to deduct up to $4,500 annually (amount will increase with inflation) for contributions to a READY account.
Funds from a READY account can be used for preventative measures (e.g., strengthening home structure) or to cover disaster recovery costs not covered by insurance.
Withdrawals from the account for qualified expenses are tax-free; withdrawals for other purposes are subject to taxation and an additional 20% penalty.
The account must be managed by a bank or other approved institution, and its assets cannot be invested in life insurance contracts.
Status:
Introduced
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