Why open a catastrophe savings account?
Catastrophe savings accounts allow you to set money aside, state income tax-free, to pay for qualified catastrophe expenses. The account is subject to dollar limitations. The amount you contribute to your catastrophe savings account can be deducted in computing your South Carolina taxable income.

Any interest earned by the catastrophe savings account will be exempt from state income tax and should be subtracted in computing your South Carolina taxable income. If you withdraw funds from your catastrophe savings account to pay for qualified catastrophe expenses, you do not have to include the withdrawal in your South Carolina taxable income.

Catastrophe Savings Accounts

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1. Why open a catastrophe savings account?
2. What are qualified catastrophe expenses?
3. What are the requirements of a catastrophe savings account?
4. Who can contribute to a catastrophe savings account?
5. Where can I establish a catastrophe savings account?
6. Can I invest my catastrophe savings account in stocks and bonds?
7. How much can be deposited in a catastrophe savings account?
8. How do I report contributions to a catastrophe savings account on my South Carolina income tax return?
9. How much will I save on state income taxes?
10. Can I transfer money from my regular savings account into a catastrophe savings account?
11. How are interest earnings from my catastrophe savings account reported on my tax returns?
12. What records do I need to keep regarding withdrawals from my catastrophe savings account to pay for qualified catastrophe expenses?
13. What if I withdraw the money in my account for purposes other than qualified catastrophe expenses?