(WTNH) — The IRS is sending a holiday gift to many residents in northeast Connecticut.
The guidance released by the Treasury Department comes after 19 months of negotiation with two administrations by Reps. Courtney and Larson.
It allows for the treatment of crumbling foundation-related repair costs as a “casualty loss” deduction from a homeowner’s taxable income. The lawmakers say change is effective immediately, and taxpayers are allowed to submit amended returns.
“This tax guidance adds a powerful new tool to the toolbox of options for homeowners and communities looking for way to get their arms around this extensive and long-term problem for our region,” said Rep. Courtney. “The origins of this effort started at the grassroots level from homeowners speaking out at community meetings and from Connecticut’s CPAs who urged Washington to extend casualty loss deduction to this problem.”
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Rep. Larson praised the Trump and Obama Administrations for working to secure the relief for homeowners. Rep. Larson’s highest praise was left for Courtney. He said the eastern Connecticut congressman and string grassroots efforts by homeowners and communities made this happen.
“It is the first time that the federal government has acknowledged the unique harm Connecticut residents have suffered through no fault of their own,” said Rep. Larson who also credited his brother, State Senator Tim Larson, for fighting to include tens of millions of dollars in state aid to help homeowners.
“Our work is not done. Rep. Courtney and I will continue to engage with the administration and colleagues on both sides of the aisle to pursue every possible avenue at the federal level to provide relief for these homeowners.”
The precedent for the relief comes from tax deductions given to residents in the southeastern part of the United States that dealt with faulty Chinese drywall around 2010.
The Congressmen said Treasury Secretary Steve Mnuchin, who owns a home in the northwest corner of Connecticut and went to Yale University, had a particular interest when they met with him in September.
“We brought the CCROG maps that showed the affected towns in the state of Connecticut,” said Rep. Courtney. “Secretary Mnuchin immediately zeroed in to make sure the town of Washington, where he owns property, was not included as an affected community.”
Affected homeowner Sheila Cyr says the announcement is a huge relief.
“I have this release of anxiety that’s been there for two and a half years,” said Cyr. “It’s a great feeling. It’s amazing.”
Both lawmakers advise homeowners to check with an accountant to better understand how to receive the deduction.