Update on tax relief for some disabled 9/11 Responders, Survivors and the families of those who have died from their 9/11 injuries
We wanted to take this opportunity to let you know that the IRS has updated the cover sheet to Publication 3920, “Tax Relief for Victims of Terrorist Attacks”. The updated information will help disabled 9/11 Responders, Survivors and the families of those that have died from their injuries in the last three years to understand the tax relief to which they are entitled.
This includes clear examples of who the law could apply to and the 800 number for the unit that can answer questions about these provisions, 1 866 562 5227.
As you know, because of the efforts of Senator Kirsten Gillibrand earlier this year, the IRS acknowledged that some little-known tax breaks that would benefit both 9/11 Responders and Survivors who were disabled by their 9/11 injuries, as well as the families of those that have recently died of their 9/11 injuries were still available to be used.
Due to the delays the IRS has had in updating all of their publications that cover these tax benefits, Senator Gillibrand recently called IRS Commissioner Koskinen, urging more immediate action to inform Responders and Survivors on who the law applies to and how to access it. In response, the Commissioner has had the IRS update their temporary cover sheet, whose text is below. It provides much more information while we wait for the full publications to be updated for the next tax season.
In a statement released to the press 911 Health Watch praised Senator Gillibrand:
“Senator Gillibrand has gotten a big win for injured 9/11 Responders and for the families of those who have died from their 9/11 injuries. With the information and the examples that IRS is now providing, most should be able to start to access the tax relief that they are entitled to. Commissioner Koskinen should be commended for quickly responding to the Senator’s request that better information be made available for taxpayers, while the IRS publications are redone in time for the coming tax season.” Ben Chevat Executive Director 911 Health Watch
You can now go to the IRS Publication 3920 and down load the new “cover sheet” which provides the information or you can read the text below.
Also you can go to the 911 Health Watch webpage that explains the issue here.
Also below is a copy of today’s NY Daily News article “IRS updates public guidance for 9/11 survivors, families to claim tax exemptions on disability payments” on the issue.
IRS updates public guidance for 9/11 survivors, families to claim tax exemptions on disability payments
Disability payments ‘for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies)…are not included in income,’ the agency says in a Thursday update.
BY Dan Friedman
NEW YORK DAILY NEWS
Friday, August 8, 2014, 1:03 AM.
The IRS is finally updating its public guidance to make it clear that 9/11 survivors and their families can claim tax exemptions on their disability payments.
Disability payments “for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies)…are not included in income,” the agency says in a Thursday update.
A 2002 law allows thousands of cops, firefighters and other first responders sickened after working at Ground Zero, and the families of those who’ve died, to claim $10,000, or the last three years of taxes the victim paid, whichever is larger.
But the IRS has not noted the benefit on its forms and many who could benefit were unaware of it. Disability payments for injuries incurred from a terrorist attack are not included in income, the agency said in a Thursday update.
The update followed pressure from Sen. Kirsten Gillibrand and coverage in the Daily News.
“Simply put, our 9/11 heroes must get the tax benefits they deserve this year. I appreciate the commissioner’s follow through on our conversation, this is an important leap forward,” Gillibrand said.
An IRS spokesman said: “The IRS has taken a number of recent steps to assist victims of 9/11 and will continue to take more actions going forward.”
Additional Information for Publication 3920
(Publication 3920 begins after this additional information.)
The following paragraphs replace the Disability Payments discussion on page 9 of Publication
For tax years ending after September 10, 2001, disability payments (including Social
Security Disability Insurance (SSDI) payments) for injuries incurred as a direct result of a
terrorist attack directed against the United States (or its allies), whether outside or within
the United States, are not included in income. However, you must include in your income
any amounts that you received or you would have received in retirement had you not
become disabled as a result of a terrorist attack, even if the amounts were provided to
you as disability payments for injuries incurred as a direct result of a terrorist attack
directed against the United States.
Contact the company or agency making the disability payments if it incorrectly reported
payments you received in the prior year as taxable income to the IRS on Form W-2,
Wage and Tax Statement, or on Form 1099-R, Distributions From Pensions, Annuities,
Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to request that it
reissue the form to report some or all of these payments as nontaxable income in box 12
(under code J) on Form W-2 or in box 1 but not in box 2a on Form 1099-R.
If income taxes are being incorrectly withheld from these disability payments, you may
also submit Form W-4, Employee’s Withholding Allowance Certificate, to the company or
agency to stop the withholding of income taxes from payments reported on Form W-2 or
you may submit Form W-4P, Withholding Certificate for Pension or Annuity Payments, to
stop the withholding of income taxes from payments reported on Form 1099-R. If you
receive SSDI payments for injuries you incurred as a direct result of a terrorist attack,
you may submit Form W-4V, Voluntary Withholding Request, to your local Social
Security office by mail or in person to stop the withholding of income taxes from the
SSDI excluded from your income.
Disability payments you receive for injuries not incurred as a direct result of a terrorist
attack or for illnesses or diseases not resulting from an injury incurred as a direct result
of a terrorist attack cannot be excluded from your income under this provision but may
be excludable for other reasons. See Publication 907, Tax Highlights for Persons with
We are working on updates to the discussion of tax forgiveness provided upon death to victims
of the Oklahoma City attack or September 11 attacks. Tax forgiveness, including the $10,000
minimum amount of relief, continues to be available to persons who have died in recent years if
their death is a result of wounds or injury incurred as a result of these attacks. While income tax
forgiveness applies back to 1994 for victims of the Oklahoma City attack and to 2000 for victims
of the September 11 attacks, the IRS will refund taxes only for certain years. You must request
the refund within 3 years from the time you previously filed an income tax return or 2 years from
the time the tax was paid, whichever is later. See Refund of Taxes Paid on page 7 for more
information. Two examples demonstrate how this rule may apply:
A person dies in 2014 as a result of wounds incurred as a result of the September 11
attacks. He had an income tax liability of $17,500 for 2011, $18,025 for 2012 and $7,000
for 2013. He filed his tax returns on time each year and paid all of his tax when due. The
total, $42,525, is eligible for tax forgiveness. However, the $17,500 refund for 2011 must
be requested by April 15, 2015.
A child wounded in the September 11 attacks dies in 2012 as a result of those wounds
and never had any income tax liability. She qualifies for the minimum relief of $10,000.
The $10,000 is treated as a tax payment for 2012 and will be refunded if tax forgiveness
is requested by April 15, 2016.
Follow the instructions in the publication for filing claims and attach a copy of the death
certificate and documents or statements that link the death to wounds or injury incurred as a
result of these attacks.
The IRS has set up a special office for processing returns and claims for tax forgiveness. If you
use the U.S. Postal Service or a private delivery service, file these returns and claims at:
Internal Revenue Service; 333 W. Pershing, Stop 6503, P5; Kansas City, MO 64108. Do not
use the addresses listed on page 8 under Where To File.
The IRS continues to offer special assistance to those affected by a terrorist attack, as well as
survivors and personal representatives of the victims. Call us at 1-866-562-5227 as directed in
the publication. The hours of service have changed however. Call us between 7 a.m. and 7 p.m.
local time, Monday through Friday. The hours are the same for assistance in English or
Spanish. Do not use the times on page 2 or page 17.