Friday, April 11, 2014


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9/11 first responders and survivors eligible for tax relief

WASHINGTON– As tax day nears, U.S. Senator Kirsten Gillibrand (D, NY) announced that the Internal Revenue Service (IRS) has updated and clarified the guidelines to ensure that it’s clear that those that have fallen ill due to their work after 9/11 are still entitled to the tax benefits provided by the Victims of Terrorism Tax Relief  law. This action comes after Senator Gillibrand, last month, urged the federal agency to clarify its confusing and outdated publications that were mostly written in 2002 and do not make clear that the law still applies. 

Under current law, disability payments related to 9/11-related injuries and health problems are non-taxable.  Many 9/11 first responders and survivors, however, struggle to get their insurance carriers to comply with the law, or are unaware that these benefits are tax-exempt due to vague tax publications. Gillibrand also noted that the law clearly explains that the estates of those who die from 9/11 injuries are entitled to an income tax refund of $10,000.

Last month, Senator Gillibrand pressed the IRS to update its Publication 3920: Tax Relief for Victims of Terrorist Attacks publication and include clear examples of present-day situations faced by the injured, sick and dying 9/11 responders and survivors to ensure that they know to claim and receive the tax benefits they deserve.   

“Our 9/11 heroes who answered the call of duty deserve clear, unequivocal guidelines on the tax relief that they are entitled to,” said Senator Gillibrand. “Sadly, thousands of our injured and sick heroes and the families of the dying face unnecessary obstacles because of a bureaucratic blunder or are unaware of their right to a tax refund. The IRS is taking the right steps to update and clarify its publications and I will continue to fight for our responders to ensure they get back the tax benefits they are owed.”

Under the current Victims of Terrorism Tax Relief  law, if an individual receives disability or other benefits as a result of their illness or injury linked to a terrorist attack, including September 11th, those benefits are non-taxable.  In addition, if an individual dies as a result of a terrorist act, his or her family is entitled to at least a $10,000 refund.  The IRS Publication 3920: Tax Relief for Victims of Terrorist Attacks, however, did not adequately explain that disability payments for 9/11-related injuries are also exempt from taxes since the rules were published in 2002. The document also did not make clear that the families of those that have died from 9/11-related illnesses or injuries are entitled to an income tax refund of at least $10,000.

As a result, many employers, as well as the victims of terrorism themselves, were not aware of this law and 9/11 responders and survivors ended up being taxed on their disability payments.  Senator Gillibrand pushed the IRS to update its publications to employers and urged the agency to update their eligibility guidelines for individuals and employers since many are eligible to apply for retroactive tax refunds, making clear that those still suffering from injury, or the family of those who have died since 2002 would still be eligible for this tax benefit. The IRS has added a clarifying cover letter to its Publication 3920 in the interim while they work on updating the publications for the next tax year.