Trial Lawyers Care, Inc. is the non-profit corporation set up by volunteer trial lawyers across the nation to provide free legal services to the September 11th terrorist attack victims who are eligible and choose to make claims under the federal September 11th Victim Compensation Fund.
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President Signs Victims of Terrorism Relief Act;
Law Affects Tax
Liability of Victims

Posted: February 2, 2002

On January 23, 2002, the President signed into law the Victims of Terrorism Relief Act . The newly enacted law amends the Internal Revenue Code in a number of ways that directly affect the tax liability of victims of the September 11 terrorist attacks.

Of most direct relevance to the free legal services provided by Trial Lawyers Care, the new law specifically exempts from gross income amounts received as payments from the September 11th Victim Compensation Fund.

The law also affects the tax status of September 11 victims (as well as the tax status of victims who died of terrorism involving anthrax and victims who died in the Oklahoma City bombing) in a number of other important ways. Some highlights of these changes:

Victims will not be subject to federal income taxes with repect to the taxable year in which they died (2001 or 1995) and also with respect to the previous year... Certain death benefits paid by an employer to a victim of terrorism are excluded from gross income... Estate taxes are reduced for terrorism victims (and for certain members of the Armed Forces) but they are not eliminated... Disability payments made to injured terrorist victims are excluded from gross income....

For more information about how these changes may affect you or any other individual, consult your accountant, tax attorney, or the Internal Revenue Service.

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