Washington–Legislation that would exclude money the government grants to homeowners for flood repairs from being considered as income that disqualifies them from federal assistance programs has won passage in the House of Representatives.
The bill, which has insurance industry support, now moves to the Senate. It was introduced by Rep. Richard Baker, R-La., in February. Known as HR 804, it is a response to an Internal Revenue Services decision issued last year.
Under that IRS finding, all flood mitigation grants must be reported as income for tax purposes. According to the House Financial Services Committee, where Rep. Baker chairs a key subcommittee, anecdotal evidence has shown that homeowners have refused grant offers for mitigation out of fear of the tax implications.
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