Questions & Answers

What is a Mississippi catastrophe savings account?

A catastrophe savings account is a savings or money market account you set up to cover home damage caused by a catastrophe. Catastrophes are any disaster not covered under most normal property insurance policies, like hurricanes, tornadoes, flooding, etc.

Any amounts contributed to a catastrophe savings account and any interest the account earns isn't taxable to Mississippi. Withdrawals from the account are only taxable if they aren't used to pay for catastrophe expenses. In this case, taxable withdrawals are also subject to an additional 2.5% tax, with certain exceptions (such as no longer owning and living in a Mississippi home).

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