Is Your New York Rising Grant Taxable?

Homeowners who have received grants under the New York Rising program have this question:

Will I have to pay taxes on the assistance received?

The answer, like many things in the tax code, is yes with an “if” and no with a “but”.

In general, the money you received from New York Rising to reimburse you for (or pay for) repairs made to your home and property is not included in your gross income (IRC section 139(a)). That means that it will not show up on page one of your 1040.

However, the same code section goes on to say that you are not allowed to double dip (IRC section 139(h)). In this case, double dipping means that if you already deducted a Sandy-related loss on a tax return filed in a prior year, you can’t necessarily avoid tax on a NY Rising grant received in the current year. Basically, you have to recompute the loss that you deducted, this time reducing the loss by the amount of your reimbursement. If the result is a lower deduction than previously reported, you have taxable income now.

This is a brief overview and there can be many complicating factors. To find out how this applies to your situation please contact our office.

For more information, contact our office.

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