Disaster Grants Wonít Affect Social Security Or Taxes
March 13, 2006, SACRAMENTO, Calif. -- Some Californians have expressed concern that state and federal disaster grants might cause them to sacrifice Social Security benefits, pay additional taxes, or give up income-based benefit programs, but state and federal officials say that concern is unfounded.
Henry Renteria, state coordinating officer and director of the Governorís Office of Emergency Services (OES), said ďA state or federal grant to individuals does not add to their taxable income, as long as the grant is given as assistance to recover from a disaster.Ē
Grants from the Federal Emergency Management Agency (FEMA) and OES to individual California citizens affected by this winterís floods have paid for temporary housing and for other needs assistance (ONA), which covers items such as personal property loss, medical care, and transportation.
ďThe grants do not affect a personís eligibility for other federal assistance programs,Ē said Federal Coordinating Officer Tom Davies of FEMA. They are part of FEMAís mission to help victims of disaster return to normal life as quickly as possible.Ē
Here are answers to typical questions:
Question: Iím between 62 and 65, and I receive Social Security benefits. If I earn more than a certain amount each year, I must repay part of my Social Security payment. Will FEMA grants add to my income and require me to repay Social Security?
Answer: No. FEMA grants for housing and ONA are not counted as income.
Question: Iím over 65, but if I earn more than a certain amount, I must pay tax on my Social Security income. Will FEMA grants boost my income and require me to pay tax on my Social Security income?
Answer: No. Again, the IRS does not count FEMA grants for housing and ONA as income.
Question: Will receiving a grant raise my income to the point that I am no longer eligible for Medicaid, welfare assistance, food stamps, or Temporary Assistance to Needy Families (TANF)?
Answer: No. Grants for housing and ONA are not counted as income in determining eligibility for any income-tested benefit programs that the U.S. government funds.
Question: Does any kind of FEMA or state grant count as income?
Answer: Yes. The Internal Revenue Service considers mitigation grants to make homes and businesses safer from future disasters to be taxable improvements to private property. However, these grants are in a separate program and are not awarded to individuals registering for disaster assistance.
- Contact Information
- Barbara J. Ellis
- Media Contact
- Federal Emergency Management Agency (FEMA)
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