Disabled 9/11 Survivors and Families May be Entitled to Tax Break: IRS Provides Clarification in Recent Update on How to Claim Exemptions

Last week the IRS updated its public guidance  on the “Tax Relief for Victims of Terrorists Attacks” in order to ensure that all 9/11 survivors and their families are aware that they may be entitled to a tax break on their disability payments including social security disability.

The IRS has been under some scrutiny lately by 9/11 advocates. They claim that the IRS may not have done enough to ensure that the 9/11 community was aware of these tax breaks. Advocates as well as Senator Gillibrand have been publicly encouraging survivors and families of the deceased who have died of their illnesses in the last 3 years to take advantage of these tax benefits they are entitled to.

The law, which was passed shortly after the 9/11 attacks, states that disability income due to an act of terrorism is not taxable. Many had not been aware of the tax break because the IRS did not make it clear in its public guidance. As a result, many victims were left without refunds. Senator Gillibrand  in particular has been tireless in advocating for the 9/11 Community. She contacted IRS commissioner Koskinen who quickly took action and had a publication cover sheet updated with the proper guidance information.

The update makes it easier to understand the law. It clarifies how to go about filing and the rules that apply. Needless to say, Senator Gillibrand has won another battle for both 9/11 responders, survivors and the families of those who died because of their 9/11 related illnesses and injuries. Now that the information is available, they can take advantage of the tax breaks.

Under the Victims of Terrorism Tax Relief Act, the estates of the deceased would receive $10,000 in the form of refunds or tax liability forgiveness for taxes paid between the year 2000 and 2002. Individuals still suffering from 9/11 related illnesses or who who have died since 2002 are still eligible for the tax benefit.

The IRS has a designated phone line to answer any questions you may have about the Victims of Terrorism Tax Relief Act. Call 1-866-562-5227 to find out if you may be eligible for this tax break.

Angela Luongo, a Paralegal with Hansen & Rosasco, LLP contributed to the writing of this post.