Tax Relief for Victims of 9/11 Terrorist Attacks

Because of the efforts of Senator Kirsten Gillibrand, some little-known tax breaks for injured and ill 9/11 Responders and Survivors will now be clearly available to injured and ill 9/11 Responders and Survivors and their families.

In October of 2001, just weeks after the 9/11 attacks, Congress passed and then President Bush signed into law the “Victims of Terrorism Tax Relief Act of 2001.” While certain provisions of the Act are well known, such as payments from the September 11th Victim Compensation Fund being exempt from Federal Taxes, some other provisions that have a direct effect on the growing number of Responders and Survivors who continue to suffer from the effects of toxins at Ground Zero are not well known or readily accessible by affected tax payers, they are:

Disability Payments to Survivors
Disability payments, including Social Security Disability Insurance (SSDI) payments aren’t taxable if they’re for injuries incurred as a direct result of any terrorist attack (including the Oklahoma City, September 11 or 2001 anthrax attacks) against the United States or its allies. However, you must include in your income any disability payments you received or would’ve received in retirement if you hadn’t become disabled as a result of a terrorist attack.

Tax Forgiveness for People who Died
Federal income tax liabilities of people who died from wounds or injuries related to the Oklahoma City or September 11 attacks are forgiven. Federal income tax liabilities of people who died from an illness related to the 2001 anthrax attacks are also forgiven. Income tax is forgiven going back to 2000 (1994 for victims of the Oklahoma City attack) whether a person was killed in an attack, died later as a result of an attack or by participating in rescue or recovery operations. A minimum of $10,000 in relief is provided if the deceased person’s total tax forgiveness is less than $10,000. To find out which years are eligible for a credit or refund, see the enhanced Publication 3920, Tax Relief for Victims of Terrorist Attacks (September 2014). (IRS Website)

Thru Senator Gillibrand’s efforts in 2014 and the commendable response by the IRS Commissioner John Koskinen the Internal Revenue Service created a web page just on this issue that fully explains to taxpayers who might be able to take advantage of these tax benefits and how to access them. The IRS is also updating other publications as well in time for the coming tax season.

Here is the IRS webpage Tax Relief for Victims of Terrorist Attacks and here is where you can download the Updated Publication 3920, Tax Relief for Victims of Terrorist Attacks (September 2014).

You should talk to a tax professional to see if this applies to you and your own situation, you can also contact the IRS directly.

For questions about tax forgiveness, payments to survivors or disability payments related to a terrorist attack call the IRS Special Services Hotline toll-free at 866-562-5227 FREE. The hotline is available Monday through Friday from 7 a.m. – 7 p.m. local time.

Revised 3/18/2016