Taxes on the money received for the aftermath of the disastrous train crash in East Palestine, Ohio, last year are not due to thousands of Americans.
Declaring that a derailment is “an event of a catastrophic nature,” the Internal Revenue Service (IRS) announced the news on Wednesday. As such, associated payments are “qualified disaster relief payments.”
A hazardous material freight train derailed on February 3 of last year, releasing poisonous chemicals into the air, ground, and water surrounding East Palestine.
More than $104 million has already been spent by operator Norfolk Southern on its response, including direct assistance to East Palestine people.
People have been paid in some kind all around Ohio, Pennsylvania, and West Virginia.
Many recipients of these payouts won’t be required to pay taxes, according to the IRS, because “qualified disaster relief payments” are formally excluded from gross income. Payments paid by insurance or other reimbursement agencies are not covered by this, though.
Tax-free payments are available for the following common carrier catastrophe relief payments:
- $1,000 “inconvenience” payments made once to impacted parties
- Clothes and personal item replacement costs, as well as relocation costs
- Compensation to residents who sold their houses following the disaster; expenses of restoring or renovating dwellings and the surrounding area
- Medical costs
The following disaster relief payments are still taxable:
- Lost wages
- Access payments to property owners to allow the common carrier access to the train track for remediation and to clean nearby creeks and streams
- Payments to businesses
If you received payments related to the East Palestine train derailment, how do you file your taxes?
You don’t have to declare qualifying disaster relief payments if you haven’t already filed your 2023 return, but make sure you include any of the aforementioned payments that are still taxable.
If filing your Form 1040 online, label the PDF of the Form 1099-MISC that Norfolk Southern would have sent with your payout “EPTDR-East Palestine Train Derailment Relief.”
Should you file on paper, put “East Palestine Train Derailment Relief” at the top of your Form 1040.
Form 1040-X allows you to amend your return, disclose the exclusion, and get a refund for taxes paid if you have already filed your 2023 return and claimed your eligible disaster relief funds.
For this form as well, the same file name rules apply, although you can also put “East Palestine Train Derailment Relief” at the start of Part III, Explanation of Changes.
The file name rules for this form are the same as for the others, although you can also put “East Palestine Train Derailment Relief” at the start of Part III, Explanation of Changes.
Matt Pinner is a dedicated journalist for WVPrepBB.com, specializing in USA and crime news. With a keen eye for detail and a passion for uncovering the truth, Matt brings timely and insightful reporting to his readers. His work on WVPrepBB.com keeps the community informed and engaged with the latest developments in national news and criminal justice.
