if such individual occupied any residence in the United 
States at any time during the taxable year. 
‘‘(d) DISASTER SAVINGS ACCOUNT.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘disaster savings 
account’ means a trust created or organized in the 
United States as a disaster savings account exclu-
sively for the purpose of paying the qualified dis-
aster expenses of the account beneficiary, but only 
if the written governing instrument creating the 
trust meets the following requirements: 
‘‘(A) Except in the case of a rollover con-
tribution described in subsection (f)(5), no con-
tribution will be accepted— 
‘‘(i) unless it is in cash, or 
‘‘(ii) to the extent such contribution, 
when added to previous contributions to 
the trust for the calendar year, exceeds the 
dollar limitation in effect under subsection 
(b). 
‘‘(B) The trustee is a bank (as defined in 
section 408(n)), an insurance company (as de-
fined in section 816), or another person who 
demonstrates to the satisfaction of the Sec-
retary that the manner in which such person 
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will administer the trust will be consistent with 
the requirements of this section. 
‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts. 
‘‘(D) The assets of the trust will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
‘‘(E) The interest of an individual in the 
balance in his account is nonforfeitable. 
‘‘(2) QUALIFIED
DISASTER
EXPENSES.—The 
term ‘qualified disaster expenses’ means— 
‘‘(A) disaster mitigation expenses, and 
‘‘(B) disaster recovery expenses. 
‘‘(3) DISASTER
MITIGATION
EXPENSES.—The 
term ‘disaster mitigation expenses’ means expenses 
for any of the following with respect to the residence 
referred to in subsection (c): 
‘‘(A) Safe rooms. 
‘‘(B) Opening protection, including impact 
and wind resistant windows, exterior doors, and 
garage doors. 
‘‘(C) Reinforcement of roof-to-wall and 
floor-to-wall connections for wind or seismic ac-
tivity. 
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‘‘(D) Roof covering for impact, fire, or 
high wind resistance. 
‘‘(E) Cripple and shear walls to resist seis-
mic activity. 
‘‘(F) Flood resistant building materials. 
‘‘(G) Elevating structures and utilities 
above base flood elevation. 
‘‘(H) Fire resistant exterior wall assem-
blies/systems. 
‘‘(I) Lightning protection systems. 
‘‘(J) Whole home standby generators. 
‘‘(K) Any activity specified by the Sec-
retary as appropriate to mitigate the risks of 
future hazards (including earthquake, flood, 
hail, hurricane, lightning, power outage, tor-
nado, and wildfire) and other natural disasters. 
‘‘(4) DISASTER
RECOVERY
EXPENSES.—The 
term ‘disaster recovery expenses’ means with respect 
to the residence referred to in subsection (c) any ex-
pense incurred to replace or repair disaster-related 
uninsured personal casualty personal losses totaling 
$3,000 or greater. 
‘‘(5) DISASTER-RELATED
UNINSURED
PER-
SONAL CASUALTY LOSS.—The term ‘disaster-related 
uninsured personal casualty loss’ means a personal 
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casualty loss (as defined in section 165(h)(4)(B), de-
termined without regard to the second sentence 
thereof) attributable to a State or federally declared 
disaster for which a deduction is allowable under 
section 165 (without regard to subsection (h)(1)). 
‘‘(6) FEDERALLY
DECLARED
DISASTER.—The 
term ‘federally declared disaster’ has the meaning 
given such term by section 165(h)(3)(C). 
‘‘(7) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the disaster savings account was established. 
‘‘(e) TREATMENT OF ACCOUNT.— 
‘‘(1) IN GENERAL.—A disaster savings account 
is exempt from taxation under this subtitle unless 
such account has ceased to be a disaster savings ac-
count. Notwithstanding the preceding sentence, any 
such account is subject to the taxes imposed by sec-
tion 511 (relating to imposition of tax on unrelated 
business income of charitable, etc. organizations). 
‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 
to the rules of paragraphs (2) and (4) of section 
408(e) shall apply to disaster savings accounts, and 
any amount treated as distributed under such rules 
shall be treated as not used to pay disaster mitiga-
tion expenses. 
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‘‘(f) TAX TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) AMOUNTS
USED
FOR
DISASTER
MITIGA-
TION EXPENSES.—Any amount paid or distributed 
out of a disaster savings account which is used ex-
clusively to pay qualified disaster expenses of any 
account beneficiary shall not be includible in gross 
income. 
‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR 
DISASTER
MITIGATION
EXPENSES.—Any amount 
paid or distributed out of a disaster savings account 
which is not used exclusively to pay the qualified dis-
aster expenses of the account beneficiary shall be in-
cluded in the gross income of such beneficiary. 
‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE-
FORE DUE DATE OF RETURN.— 
‘‘(A) IN
GENERAL.—If any excess con-
tribution is contributed for a taxable year to 
any disaster savings account of an individual, 
paragraph (2) shall not apply to distributions 
from the disaster savings accounts of such indi-
vidual (to the extent such distributions do not 
exceed the aggregate excess contributions to all 
such accounts of such individual for such year) 
if— 
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‘‘(i) such distribution is received by 
the individual on or before the last day 
prescribed by law (including extensions of 
time) for filing such individual’s return for 
such taxable year, and 
‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such excess contribution. 
Any net income described in clause (ii) shall be 
included in the gross income of the individual 
for the taxable year in which it is received. 
‘‘(B) EXCESS
CONTRIBUTION.—For pur-
poses of subparagraph (A), the term ‘excess 
contribution’ means any contribution (other 
than a rollover contribution described in para-
graph (5)) which is not deductible under this 
section. 
‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT 
USED FOR DISASTER MITIGATION EXPENSES.— 
‘‘(A) IN GENERAL.—The tax imposed by 
this chapter on the account beneficiary for any 
taxable year in which there is a payment or dis-
tribution from a disaster savings account of 
such beneficiary which is includible in gross in-
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scribed in subparagraph (A) from a disaster 
savings account which was not includible in the 
individual’s gross income because of the appli-
cation of this paragraph. 
‘‘(g) COST-OF-LIVING ADJUSTMENT.— 
‘‘(1) IN GENERAL.—The $5,000 amount in sub-
section (b) shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which such taxable year begins deter-
mined by substituting ‘calendar year 2012’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any increase under para-
graph (1) is not a multiple of $50, such increase 
shall be rounded to the nearest multiple of $50. 
‘‘(h) SPECIAL RULES.— 
‘‘(1) DENIAL
OF
DEDUCTION
TO
DEPEND-
ENTS.—No deduction shall be allowed under this 
section to any individual with respect to whom a de-
duction under section 151 is allowable to another 
taxpayer for a taxable year beginning in the cal-
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endar year in which such individual’s taxable year 
begins. 
‘‘(2) TAXABLE YEAR MUST BE FULL TAXABLE 
YEAR.—Except in the case of a taxable year closed 
by reason of the death of the taxpayer, no deduction 
shall be allowed under this section in the case of a 
taxable year covering a period of less than 12 
months. 
‘‘(3) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
‘‘(A) Section 219(d)(2) (relating to no de-
duction for rollovers). 
‘‘(B) Section 219(f)(3) (relating to time 
when contributions deemed made). 
‘‘(C) Section 219(f)(5) (relating to em-
ployer payments). 
‘‘(D) Section 408(g) (relating to commu-
nity property laws). 
‘‘(E) Section 408(h) (relating to custodial 
accounts). 
‘‘(F) Section 224(f)(7) (relating to transfer 
of account incident to divorce). 
‘‘(G) Section 224(f)(8) (relating to treat-
ment after death of account beneficiary). 
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‘‘(4) COORDINATION WITH CASUALTY LOSS DE-
DUCTION.—No deduction shall be allowed under sec-
tion 165 for a loss for which a disaster recovery ex-
pense payment is made from a disaster savings ac-
count. 
‘‘(i) REPORTS.—The Secretary may require the trust-
ee of a disaster savings account to make such reports re-
garding such account to the Secretary and to the account 
beneficiary with respect to contributions, distributions, the 
return of excess contributions, and such other matters as 
the Secretary determines appropriate.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
of section 62 of such Code is amended by inserting after 
paragraph (21) the following new paragraph: 
‘‘(22) DISASTER SAVINGS ACCOUNTS.—The de-
duction allowed by section 224.’’. 
(c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973 
of such Code (relating to tax on excess contributions to 
certain tax-favored accounts and annuities) is amended— 
(1) by striking ‘‘or’’ at the end of subsection 
(a)(4), by inserting ‘‘or’’ at the end of subsection 
(a)(5), and by inserting after subsection (a)(5) the 
following new paragraph: 
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‘‘(6) a disaster savings account (within the 
meaning of section 224(d)),’’, and 
(2) by adding at the end the following new sub-
section: 
‘‘(h) EXCESS CONTRIBUTIONS TO DISASTER SAVINGS 
ACCOUNTS.—For purposes of this section, in the case of 
disaster savings accounts (within the meaning of section 
224(d)), the term ‘excess contributions’ means the sum 
of— 
‘‘(1) the aggregate amount contributed for the 
taxable year to the accounts (other than a rollover 
contribution described in section 224(f)(5)) which is 
not allowable as a deduction under section 224 for 
such year, and 
‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by 
the sum of— 
‘‘(A) the distributions out of the accounts 
which were included in gross income under sec-
tion 224(f)(2), and 
‘‘(B) the excess (if any) of— 
‘‘(i) the maximum amount allowable 
as a deduction under section 224(b) for 
the taxable year, over 
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‘‘(ii) the amount contributed to the 
accounts for the taxable year. 
For purposes of this subsection, any contribu-
tion which is distributed out of the disaster sav-
ings account in a distribution to which section 
224(f)(3) applies shall be treated as an amount 
not contributed.’’. 
(d) FAILURE TO PROVIDE REPORTS ON DISASTER 
SAVINGS ACCOUNTS.—Paragraph (2) of section 6693(a) 
of such Code (relating to reports) is amended by redesig-
nating subparagraphs (D) and (E) as subparagraphs (E) 
and (F), respectively, and by inserting after subparagraph 
(C) the following new subparagraph: 
‘‘(D) section 224(i) (relating to disaster 
savings accounts),’’. 
(e) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by striking the last item and inserting the fol-
lowing: 
‘‘Sec. 224. Disaster savings accounts. 
‘‘Sec. 225. Cross reference.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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