South Carolina allows eligible homeowners to set up Catastrophe Savings Accounts where they can sock away money to meet their insurance deductible payments in the event of a storm-related damage claim.
Who: Residents who own a single-family home that qualifies as a legal residence for South Carolina property tax purposes can contribute.
Why: The accounts allow home- owners to set money aside, free of state income taxes, to pay for qualified catastrophe expenses. Participants can deduct contributions and interest earned from their income on their South Carolina tax returns. Withdrawals also are exempt from income tax at the state level.
Where: An account can be established at any state- or federally chartered bank. The money can be placed in an interest-bearing account; it cannot be invested in stocks or bonds.
Limits: For most people, the maximum contribution is twice the amount of the deductible payment, up to $15,000. A taxpayer may establish only one catastrophe account, and it must be labeled as such.
On the web: Go to www.doi.sc.gov and click on Consumer Services, then Coastal Insurance, for more information.