December 13, 2021 1:24 am

Disaster Relief Payments Are Tax Free

Victims of disasters may receive goods and financial help from organizations, such as the Red Cross. IRS Commissioner Rettig confirmed that such payments are not taxable to recipients. Gifts from organizations are specifically excludable from gross income (Code Sec. 102). The same tax-free treatment applies to gifts received from individuals; they are not included in gross income. Thus, for example, goods and other payments received by victims of the Surfside Condominium collapse are not taxable.

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Tax Glossary

Health savings account

For calendar year 2007, taxpayers covered by an HDHP may contribute up to the lesser of the annual deductible or $2,850 ($5,650 for family coverage).

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