U.S. Senator Chuck Schumer urged the IRS to exclude state and county grant money when calculating homeowners’ personal income during a press conference in Patchogue on Wednesday after the Suffolk County comptroller sent out 1099 income tax forms to Suffolk County residents who volunteered to upgrade their home septic systems with the help of a county program.
Mr. Schumer, alongside homeowners, contractors and county officials, said they are “all on the same side” and said homeowners should not be taxed for getting help from the state and the county to replace cesspools and outdated septic systems with new advanced nitrogen-reducing systems.
“The folks with me are trying to do the right thing for the county and the local environment,” Mr. Schumer said. “And they’re scratching their heads, saying, ‘What’s going to happen with Suffolk’s Septic Improvement Program?’”
The Suffolk County Septic Improvement Program, or SIP, provided grants ranging from $10,000 to $20,000 to contractors to upgrade program participants’ homes with nitrogen-reducing septic systems. County Comptroller John Kennedy said he brought up questions around the taxability of the grants to County Executive Steve Bellone’s office but didn’t reach out to the IRS before sending out 1099 tax forms to homeowners who took part in the program.
“Suffolk County’s historic Septic Improvement Program was carefully and purposely designed so that installation companies, and not homeowners, receive the grant funding and report those disbursements to the IRS as income,” Mr. Bellone said in a statement. “… Since the installation companies are all reporting the grant income they receive as income and are paying taxes on that income, the county is optimistic that the IRS will confirm that grants should not be considered taxable income to homeowners.”
Mr. Kennedy has said he sent out the forms out of caution and in fear of the county receiving fines from the IRS. He also said he supports SIP and hopes the IRS will rule that the grants are nontaxable.
“Until they [the IRS] say they won’t do it, these homeowners are going to be worried,” Mr. Schumer said. “I’m here to make it clear to Uncle Sam—you aren’t losing money when a Suffolk County homeowner participates in a grant program that helps the entire region and which they are encouraged to do.”
Suffolk County Legislator Bridget Fleming of Noyac thanked Mr. Schumer and others for the support they have shown and said homeowners should not be unfairly taxed for dealing with the crisis Suffolk County is facing.
“The crisis we presently are faced with is an alarming trend in the deteriorating quality of our water,” she said in a statement. “We appreciate Senator Schumer’s support to Suffolk County taxpayers and his demonstration of his commitment to our precious environment and that our residents not be unfairly burdened.”
on Jun 3, 2019