What you should know about taxes and VCF awards
The Treasury Department, together with the Internal Revenue Service (IRS), clarified in 2003 that VCF awards are tax-free. This includes lump-sum and periodic payments. Your VCF awards are excluded from your gross income, which means you do not need to report the compensation on your federal income tax returns.
9/11 victims and their families will be happy to know that this tax exemption applies to the compensation of those who sustained 9/11-related physical injuries, medical illnesses, or death. So, the survivors of individuals who passed away due to 9/11-related conditions also do not have to report the VCF payout as taxable income.
Here are other VCF tax-related information from the IRS:
- Estate tax exemption also applies to 9/11 payouts
- Social Security Disability payments linked to 9/11 injuries are tax-exempt
- Qualified disaster relief payments related to 9/11 are not taxable
- Federal income tax liabilities are forgiven for individuals who died from 9/11-related conditions.
Note that retirement disability payments unrelated to 9/11 may still be taxable. At the same time, your personal financial situation and the varying or additional tax guidelines of different states may affect your total payout.
Get legal assistance for your 9/11 VCF claim with ELG Law
Contact ELG Law today to speak to a trusted attorney regarding your 9/11 VCF claim. With decades of experience dealing with toxic exposure claims, our lawyers can confidently provide you with proper legal assistance in filing your VCF claim and receiving the maximum compensation necessary for your case.
