Article: 50153

Overview

Alabama residents may deduct from gross income deposits made into a catastrophe savings account. The deduction is $2,000 if the insurance deductible is equal to or less than $1,000. If the deductible is greater than $1,000, the deduction is less of $15,000 or twice the amount of the insurance deductible. If the taxpayer is self-insured and chooses not to obtain insurance, then the deduction is the lesser of $250,000 or the value of the taxpayer’s legal residence.

Reporting of Alabama 40 – Deposits to a Catastrophe Savings Account (Resident)

Follow the steps below:

1. Go to the State taxes section.
2. Select I’d like to see the forms I’ve filled out or search for a form.
3. In the drop list, select Alabama.
4. Select the General tab.
5. Select the 40 – Income Tax Return – Pg 2 screen.
6. Enter the intended amount on line Deposits to a catastrophe savings account under Part II.
7. Click Save to apply changes.

Additional Information

See the Alabama Form 40 instructions for more information.