Washington, D.C. – U.S. Senator Kirsten Gillibrand today announced the Internal Revenue Service (IRS) has officially updated Publication 3920: Tax Relief for Victims of Terrorist Attacks. This updated publication clarifies eligibility for tax relief under the Victims of Terrorism Tax Relief law and provides examples relevant to present-day situations faced by the injured, sick and dying 9-11 responders, survivors and families of those who have died. This action comes after Senator Gillibrand personally urged IRS Commissioner John Koskinen to clarify its previously vague and outdated publication.
“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 faced unnecessary obstacles and are unaware of their right to tax relief they are owed. I want to thank the Commissioner for working with us to ensure that our first responders will finally receive the tax benefits they deserve.”
Under the Victims of Terrorism Tax Relief law, disability or other benefits provided to an individual as a result of their illness or injury linked to a terrorist attack, including September 11th, are non-taxable. In addition, if an individual dies as a result of a terrorist act, his or her family is entitled to a minimum relief of $10,000. Eligible individuals can claim a tax credit or refund within 3 years after the due date of the return, or within 2 years after the date the tax was paid.
IRS Publication 3920: Tax Relief for Victims of Terrorist Attacks, published in 2002, did not adequately explain that disability payments for 9-11work-related injuries remain exempt from taxes. As a result, many employers, as well as the victims of 9-11 themselves, were not aware of this law and ended up reporting and paying tax on their disability payments.
In March, Senator Gillibrand wrote to IRS Commissioner Koskinen urging that Publication 3920 be revised, and the IRS released a clarifying cover letter while they worked on updating the publication. In July, after hearing from numerous 9-11 responders and community members, Senator Gillibrand pushed IRS Commissioner Koskinen to expedite the release of the updated publication.
The updated IRS Publication 3920 can be found here. If individuals have further questions, they may contact the IRS at their terrorist attack hotline at 1-866-562-5227.