Attacks Terrorist Victims of Tax Relief for

1 Department of the Treasury Contents Internal Revenue Service Future Developments .. 1. Introduction .. 1. Publication 3920. (Rev. September 2014) Payments to Survivors .. 2. Cat. No. 32806E September 11th Victim Compensation Fund of 2001 .. 2. Tax Relief for Disability Payments .. Qualified Disaster Relief Payments .. Death Benefits .. 2. 3. 4. Victims of .. Payments to Survivors of Public Safety Officers .. 4. Terrorist Tax Forgiveness for People Who Died Years Eligible for Tax Forgiveness .. 4.. 4. Attacks Amount of Tax Forgiven .. 5. Refund of Taxes Paid .. 11. How To Claim Tax Forgiveness .. 11. Estate Tax Reduction .. 13. Structured Settlement Factoring Transactions .. 13. Illustrated Worksheets B and C .. 13. Additional Worksheets .. 16. How To Get Tax Help .. 19.

2 Index .. 22. Future Developments For the latest information about developments related to Publication 3920, such as legislation enacted after it was published, go to Introduction This publication explains some of the provisions of the Victims of Terrorism Tax Relief Act of 2001. Under this Act, the following amounts are not included in income. (See Payments to Survivors, later, for details about the fol- lowing amounts.). Certain disability payments received in tax years end- ing after September 10, 2001, for injuries sustained in a Terrorist attack. Payments from the September 11th Victim Compen- sation Fund of 2001. Qualified disaster Relief payments made after Septem- ber 10, 2001, to cover personal, family, living, or fu- Get forms and other information neral expenses incurred because of a Terrorist attack.

3 Faster and easier at Death benefits paid by an employer to the survivor of an employee if the benefits are paid because the em- ployee died as a result of a Terrorist attack. Sep 09, 2014. The Act also provides that the federal income tax liabil- Useful Items ity of those who died as a result of the following Attacks is You may want to see: forgiven for certain tax years. The September 11, 2001, Attacks on the World Trade Publication Center, the Pentagon, and United Airlines Flight 93 in 556 Examination of Returns, Appeal Rights, and Somerset County, Pennsylvania (September 11 at Claims for Refund tacks). 559 Survivors, Executors, and Administrators Terrorist Attacks involving anthrax occurring after Sep- tember 10, 2001, and before January 1, 2002 (an Form (and Instructions).)

4 Thrax Attacks ). 706 United States Estate (and Generation-Skipping The April 19, 1995, attack on the Alfred P. Murrah Transfer) Tax Return Federal Building (Oklahoma City attack). 1040 Individual Income Tax Return For details, see Tax Forgiveness for People Who Died, 1040NR Nonresident Alien Income Tax Return later. 1040X Amended Individual Income Tax Return Comments and suggestions. We welcome your com- ments about this publication and your suggestions for fu- 1041 Income Tax Return for Estates and Trusts ture editions. 1310 Statement of Person Claiming Refund Due a You can write to us at the following address. Deceased Taxpayer Internal Revenue Service 4506 Request for Copy of Tax Return Tax Forms and Publications Division 1111 Constitution Ave. NW, IR-6526. Washington, DC 20224 Payments to Survivors We respond to many letters by telephone.

5 Therefore, it The following section discusses the tax treatment of cer- would be helpful if you would include your daytime phone tain amounts received by survivors of the Attacks and sur- number, including the area code, in your correspondence. vivors of people who died as a result of the Attacks . You can send your comments from formspubs/. Click on More Information and then on Give September 11th Victim Compensation us feedback.. Although we cannot respond individually to each com- Fund of 2001. ment received, we do appreciate your feedback and will Payments from the September 11th Victim Compensation consider your comments as we revise our tax products. Fund of 2001 are not included in income. Ordering forms and publications. Visit formspubs/ to download forms and publications, call Disability Payments 1-800-TAX-FORM (1-800-829-3676), or write to the ad- dress below and receive a response within 10 days after For tax years ending after September 10, 2001, disability your request is received.

6 Payments (including Social Security Disability Insurance (SSDI) payments) are not included in income if they are Internal Revenue Service for injuries incurred as a direct result of a Terrorist attack 1201 N. Mitsubishi Motorway (including the September 11 Attacks , anthrax Attacks , and Bloomington, IL 61705-6613 Oklahoma City attack) directed against the United States (or its allies). However, you must include in your income Questions about Publication 3920. If you have any disability payments you received or you would have questions about the topics covered in this publication, call received in retirement had you not become disabled as a the IRS at 1 866 562 5227 Monday through Friday during result of a Terrorist attack. the following times. In English 7 to 7 local time.

7 Disability payments you receive for injuries not ! incurred as a direct result of a Terrorist attack or In Spanish 7 to 7 local time. CAUTION. for illnesses or diseases not resulting from an injury incur . Other tax questions. If you have tax questions about red as a direct result of a Terrorist attack cannot be exclu . topics not covered in this publication, check the informa- ded from your income under this provision but may be ex . tion available on or call 1-800-829-1040. cludable for other reasons. For details, see Publication 907, Tax Highlights for Persons with Disabilities. We cannot answer tax questions sent to either of ! the above addresses. Example. Dan, a firefighter, was disabled as a direct result of the September 11 Terrorist attack on the World CAUTION.

8 Trade Center. He began receiving Social Security Page 2 Publication 3920 (September 2014). Disability Insurance (SSDI) benefits at age 54. Dan's full corrected Forms 1099-R from his employer showing retirement age for social security retirement benefits is $12,000 of the payments he received in 2012 and $5,000. age 66. Dan's birthday is April 25. In the year Dan turned of those received in 2013, which had been reported as 66, Dan received $1,500 per month in benefits from the taxable, should have been classified as nontaxable disa- Social Security Administration. Because Dan became eli- bility payments. The policeman files a Form 1040X for gible for a full retirement benefit in May, the month after he 2012 and a separate one for 2013 asking the IRS to re- turned 66, he can exclude only four months of his annual classify the payments as nontaxable.

9 He attaches the cor- benefit from his income ($6,000). Dan must report the re- rected Form 1099-R to each Form 1040X. He writes Pub- maining $12,000 on Form 1040, line 20a, or Form 1040A, lication 3920 in Part III of each Form 1040X. line 14a. He also must complete the Social Security Bene- fits Worksheet in his tax return instructions to find out if When taxes are incorrectly withheld. If you receive any part of the $12,000 is taxable. SSDI payments for injuries you incurred as a direct result of a Terrorist attack, you may submit Form W-4V, Volun- When nontaxable payments are reported as taxable. tary Withholding Request, to your local Social Security Contact the company or agency making the disability pay- Administration office by mail or in person to stop the with- ments if it incorrectly reported payments you received in holding of income taxes from the SSDI excluded from your the prior year as taxable income to the IRS on Form W-2, income.

10 Wage and Tax Statement, or on Form 1099-R, Distribu- If income taxes are being incorrectly withheld from any tions From Pensions, Annuities, Retirement or Profit-Shar- other disability payments, you may submit Form W-4, Em- ing Plans, IRAs, Insurance Contracts, etc. Ask the com- ployee's Withholding Allowance Certificate, to the com- pany or agency to issue a corrected form to report some pany or agency to stop the withholding of income taxes or all of these payments as nontaxable income in box 12 from payments reported on Form W-2. You may submit (under code J) on Form W-2 or in box 1 but not in box 2a Form W-4P, Withholding Certificate for Pension or Annuity on Form 1099-R. Payments, to stop the withholding of income taxes from File Form 1040X to correct disability payments that payments reported on Form 1099-R.