Q1. Do I have to pay taxes on the funds I received from the common carrier? A1. The common carrier issued a Form 1099-MISC to recipients of various payments, some of which are taxable and some of which are not because they are qualified disaster relief payments. Tax-free qualified disaster relief payments made by the common carrier are: One-time $1,000 payments to affected individuals; Relocation expenses and expenses for replacing clothing and personal items; Cost of repairing or rehabilitating homes and the surrounding environment; Compensation to homeowners who sold their homes after the derailment; and Medical expenses. Taxable payments include: Lost wages; Access payments to property owners to allow the common carrier access to the tracks for remediation and to clean nearby creeks and streams; and Payments to businesses. Q2. I didn't keep track of the payments I received, all I have is the total of my payments. How do I determine which are taxable and which are not? A2. You can contact the common carrier for assistance in determining a breakdown of the payments that you received. Q3. I already filed my tax return, what do I need to do? A3. If you already filed your 2023 tax return and did not report any qualified disaster relief payments as taxable on your return, you do not need to take any action. If you already filed your 2023 tax return and reported qualified disaster relief payments as taxable you can amend your return, report the exclusion, and claim any refund of taxes paid by filing Form 1040-X. The IRS urges anyone who e-filed their 2023 return to e-file their amended return to speed processing. Visit File an amended return for details. If filing Form 1040-X electronically, attach a .pdf with filename “EPTDR-East Palestine Train Derailment Relief.” You may also type in, “East Palestine Train Derailment Relief,” at the beginning of Part III, Explanation of Changes. If filing Form 1040-X on paper, write, “East Palestine Train Derailment Relief,” at the top of Form 1040-X, as well as at the beginning of Part II, Explanation of Changes. Mail the completed form to the address in the form instructions. Q4. I have not filed yet. What do I need to do? A4. Any taxpayer who has not yet filed their 2023 return does not need to report qualified disaster relief payments on their tax return, even if reported to them on Form 1099-MISC. However, taxable payments must be reported. If filing Form 1040 electronically, attach a .pdf to the Form 1040 with a filename “EPTDR-East Palestine Train Derailment Relief.” If filing Form 1040 on paper, write “East Palestine Train Derailment Relief” at the top of Form 1040. Mail the Form 1040 to the address in the form instructions. Q5. What happens if the IRS contacts me because I didn't report the full amount shown on the Form 1099-MISC? A5. The IRS is taking precautions to avoid erroneously contacting impacted individuals about non-taxable funds received from the common carrier. If you are contacted, please reference Notice 2024-46 PDF and inform the IRS employee that these payments are related to the East Palestine Derailment Relief.
