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A Tax Break on Terror-Related Disability Payments: Keep it in Mind

Tax Consequences of Victim Compensation Fund and Terror-Related Disability Payments

For individuals who sustained injuries, and for families who lost loved ones as a result of the September 11th terrorist attacks, there is some tax relief available.

In 2002, then-president George W. Bush signed into law the Victims of Terrorism Tax Relief Act of 2001. Despite the law, many people are simply unaware of the tax breaks available on disability payments associated with injuries from the terrorist attacks.

In April of 2014, U.S. Senator Kirsten Gillibrand notified constituents of an ongoing process to update vague tax guidelines — and to help ensure that victims and insurance companies are aware of the tax benefits that had been made available in 2002.

Benefits available and described in IRS publication 3920, “Tax Relief for Victims of Terrorist Attacks” include the following:

  • September 11 and Zadroga Victim Compensation Fund award payments are not considered taxable income by the IRS.
  • The disability payments of persons made ill or injured by a terrorist attack, including the attacks of September 11, 2001, are non-taxable.
  • The estate of any person killed by a terrorist attack is due a tax refund of at least $10,000.

Unfortunately, we have discovered that some injured individuals and families have paid taxes on disability payments or failed to receive a tax refund for the estate of a deceased victim. As the Internal Revenue Service (IRS) works to update its guidelines, taxpayers (or their accountants) should consult IRS publication 3920 for further information on retroactive tax benefits available under this legislation.

Notes Senator Gillibrand, “Our 9/11 heroes who answered the call of duty deserve clear, unequivocal guidelines on the tax relief that they are entitled to.”

Please make sure that you take advantage of tax breaks created for you. If you have any questions about an injury or a compensation claim in New York City, please feel free to talk to an experienced 9/11 injury attorney from Barasch & McGarry.

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  • Deadline Extended to Register for Compensation

    There is still time to apply for significant compensation if you have been diagnosed with any of the 68 cancers that doctors at the WTC Health Program (WTCHP) have linked to the WTC toxic dust. The deadline to apply to the Victim Compensation Fund (VCF) is two years from the date that a cancer has been certified by the WTC Health Program — or any other governmental agency. The two-year period to register doesn’t start on the day of a cancer diagnosis. Rather, it starts only when a cancer survivor is made aware their cancer was linked to exposure to the WTC toxins.

    For those who died from their WTC-linked cancers, the two-year period for their family to register starts on the day of the death of the WTC victim.

    Register For Compensation

Please help spread the word about the strict two-year deadline to register a claim

Many people have tried to complete the VCF application on their own, only to learn that it requires answers to hundreds of questions and many documents to download. It would be our pleasure to help you complete the process in order to ensure that you receive the compensation that you are entitled to. Please call us for a free consultation.

Let a knowledgeable attorney help you figure it out

A cancer diagnosis can be terrifying. You undoubtedly have questions about your disease and how you will pay for treatment. Lawyers at Barasch & McGarry ensure you understand the complex requirements and help devise the best strategies for obtaining compensation and appropriate medical care under the Zadroga Act. Contact our law firm online or call 888-351-9421. The initial consultation is free, so it costs you nothing to find out whether a lawyer can help.
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