The Federal Emergency Management Agency (FEMA) disaster relief grants that were handed out beginning in April 2010 in RI to residents of RI are not taxable. This is an important point and information for those having received the disaster relief grants after Rhode Island's March 2010 severe rains and flooding that encompassed most of RI (I talked about the flood impact on an earlier blog in April 2010). This means that the grant relief money is not subject to income tax, self employment tax, employment taxes (i.e. social security, medicare and federal unemployment taxes). Since this money is not considered income it is not reportable when you file your federal tax return. Remember it is the 'grant' relief dollars that are not taxable to you. 
There continues to be a lot of confusion for the recipients of this disaster relief money on how it impacts other program assistance for the impacted recipients of the dollars. And I have to say that the information communicated has not been as clear to these recipients as it should have been.
To clarify again if you received disaster relief payments as follows you do not pay income taxes or social security taxes on the dollars received:
-For personal, family or living expenses.
-For expenses incurred for the repair or renovation of a person's residence (rented or owned).
-For expenses for the repair or replacement of the contents of one's personal residence.
Many older Rhode Islanders who are receiving social security benefits worry that it may impact how much tax they pay on the income they receive. As long as it is a disaster relief grant it will not be counted as income and will not be taxed. This is a benefit which rarely many of us experience and is a great thing. Focus on a better tomorrow and the continued rebuilding of your life and residence because it is important to look ahead right now. You have made it through this tumultous event and going forward.
FEMA promises to have periodic updates on this information but the Disaster Relief Grants are not taxable income for Rhode Islanders. FEMA Disaster Relief Grants not Taxable in RI.
This blog © and its contents is original to Ginny Lacey Gorman
Ginny L. Gorman, a purveyor of Fine RI Waterfront Real Estate
Specializing in waterfront, ocean front, vacation, coastal and luxury homes for sale in North Kingstown, South Kingstown, Narragansett, Jamestown, Charlestown, East Greenwich, Exeter, West Greenwich RI and beyond ... I sell dreams! Because there is no place like home...the RI Real Estate Agent in the Sparkly Red Shoes.
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