Eligibility
Applies to individuals receiving payments for expenses related to federally declared disasters, terroristic actions, or common carrier accidents not covered by insurance.
Frequently Asked Questions
Who is eligible for the Qualified Disaster Relief Payment Exclusion?
Applies to individuals receiving payments for expenses related to federally declared disasters, terroristic actions, or common carrier accidents not covered by insurance.
How does the Qualified Disaster Relief Payment Exclusion work?
Gross income does not include amounts received by an individual to reimburse or pay for personal, family, living, or funeral expenses, or home repairs resulting from a qualified disaster.
What law authorizes the Qualified Disaster Relief Payment Exclusion?
The Qualified Disaster Relief Payment Exclusion is authorized under IRC §139 of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §139
Source: Internal Revenue Code, Title 26, United States Code
§ 139. Disaster relief payments(a) General ruleGross income shall not include any amount received by an individual as a qualified disaster relief payment.
(b) Qualified disaster relief payment definedFor purposes of this section, the term “qualified disaster relief payment” means any amount paid to or for the benefit of an individual—(1) to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster,
(2) to reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster,
(3) by a person engaged in the furnishing or sale of transportation as a common carrier by reason of the death or personal physical injuries incurred as a result of a qualified disaster, or
(4) if such amount is paid by a Federal, State, or local government, or agency or instrumentality thereof, in connection with a qualified disaster in order to promote the general welfare,
but only to the extent any expense compensated by such payment is not otherwise compensated for by insurance or otherwise.
(c) Qualified disaster definedFor purposes of this section, the term “qualified disaster” means—(1) a disaster which results from a terroristic or military action (as defined in section 692(c)(2)),
(2) a federally declared disaster (as defined by section 165(i)(5)(A)),
(3) a disaster which results from an accident involving a common carrier, or from any other event, which is determined by the Secretary to be of a catastrophic nature, or
(4) with respect to amounts described in subsection (b)(4), a disaster which is determined by an applicable Federal, State, or local authority (as determined by the Secretary) to warrant assistance from the Federal, State, or local government or agency or instrumentality thereof.
(d) Coordination with employment taxesFor purposes of chapter 2 and subtitle C, qualified disaster relief payments and qualified disaster mitigation payments shall not be treated as net earnings from self-employment, wages, or compensation subject to tax.
(e) No relief for certain individualsSubsections (a), (f), and (g) shall not apply with respect to any individual identified by the Attorney General to have been a participant or conspirator in a terroristic action (as so defined), or a representative of such individual.
(f) Exclusion of certain additional paymentsGross income shall not include any amount received as payment under section 406 of the Air Transportation Safety and System Stabilization Act.
(g) Qualified disaster mitigation payments(1) In generalGross income shall not include any amount received as a qualified disaster mitigation payment.
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