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IRS deems certain payments made by Norfolk Southern to derailment victims to be tax-exempt, disaster-related assistance

In April, Casey urged IRS Commissioner Danny Werfel to provide tax relief to Norfolk Southern derailment victims

Casey, Fetterman, and Deluzio have repeatedly fought for resources for Pennsylvanians affected by the derailment, working to help the community recover

Washington, D.C. - Today, U.S. Senators Bob Casey (D-PA) and John Fetterman (D-PA) and U.S. Representative Chris Deluzio (D-PA-17) announced that most payments made to victims of the Norfolk Southern train derailment disaster will be tax exempt. After being urged by Senator Casey, the Internal Revenue Service (IRS) has recognized the Norfolk Southern derailment as “of “catastrophic nature” and exempted individuals and families from being taxed on reimbursements for reasonable post-disaster needs including shelter, food, and clothing.

“Victims of the Norfolk Southern disaster deserved to be compensated for the hell they have been through, and these payments should never be taxed as income. Today, the IRS took the critical step to support these families. We must continue providing these communities with the relief and support they need and ensure that catastrophes like this never happen again,” said Senator Casey.

“People affected by the disaster in East Palestine have already dealt with enough, they shouldn’t have to face a huge tax bill on relief payments. Now, thanks to the Biden administration, they finally have clarity from the IRS that means many relief payments are fully tax-free. I urge Pennsylvanians impacted by the derailment to file amended returns ASAP to get the tax relief they deserve,” said Senator Fetterman.

“The East Palestine derailment was a disaster for a lot of families in Beaver County, and it is ridiculous that folks hurt by this train derailment in their backyard would have to pay taxes on Norfolk Southern’s payments to them,” said Rep. Deluzio. “I knew we had to make this right, and after successfully moving a bill through the House to waive taxes from these payments, I’m glad that the Biden Administration is taking action to help. Soon, the IRS will exempt these payments from federal taxes—just like we do for natural disasters. Next, we have to keep up the work to make freight rail safer and pass my bill, the Railway Safety Act.”

See Senator Casey’s full record on the Norfolk Southern derailment HERE.