26 U.S.C. § 139 — Disaster relief payments

Page 619 TITLE 26—INTERNAL REVENUE CODE § 139 holder as of January 1 of the calendar year in which the taxable year begins. Section 220(f)(4) shall not apply to any pay- ment or distribution from a Medicare Ad- vantage MSA. (B) Exceptions Subparagraph (A) shall not apply if the payment or distribution is made on or after the date the account holder— (i) becomes disabled within the meaning of section 72(m)(7), or (ii) dies. (C) Special rules For purposes of subparagraph (A)— (i) all Medicare Advantage MSAs of the account holder shall be treated as 1 ac- count, (ii) all payments and distributions not used exclusively to pay the qualified med- ical expenses of the account holder during any taxable year shall be treated as 1 dis- tribution, and (iii) any distribution of property shall be taken into account at its fair market value on the date of the distribution. (3) Withdrawal of erroneous contributions Section 220(f)(2) and paragraph (2) of this subsection shall not apply to any payment or distribution from a Medicare Advantage MSA to the Secretary of Health and Human Serv- ices of an erroneous contribution to such MSA and of the net income attributable to such contribution. (4) Trustee-to-trustee transfers Section 220(f)(2) and paragraph (2) of this subsection shall not apply to any trustee-to- trustee transfer from a Medicare Advantage MSA of an account holder to another Medicare Advantage MSA of such account holder. (d) Special rules for treatment of account after death of account holder In applying section 220(f)(8)(A) to an account which was a Medicare Advantage MSA of a dece- dent, the rules of section 220(f) shall apply in lieu of the rules of subsection (c) of this section with respect to the spouse as the account holder of such Medicare Advantage MSA. (e) Reports In the case of a Medicare Advantage MSA, the report under section 220(h)— (1) shall include the fair market value of the assets in such Medicare Advantage MSA as of the close of each calendar year, and (2) shall be furnished to the account holder— (A) not later than January 31 of the cal- endar year following the calendar year to which such reports relate, and (B) in such manner as the Secretary pre- scribes in such regulations. (f) Coordination with limitation on number of taxpayers having Archer MSAs Subsection (i) of section 220 shall not apply to an individual with respect to a Medicare Advan- tage MSA, and Medicare Advantage MSAs shall not be taken into account in determining whether the numerical limitations under section 220(j) are exceeded. (Added Pub. L. 105–33, title IV, § 4006(a), Aug. 5, 1997, 111 Stat. 332; amended Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(3), (b)(6), (10)], Dec. 21, 2000, 114 Stat. 2763, 2763A–628, 2763A–629; Pub. L. 108–311, title IV, § 408(a)(5)(A)–(F), Oct. 4, 2004, 118 Stat. 1191.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in subsecs. (a) and (b)(2)(A), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Part C of title XVIII of the Act is classified generally to part C (§ 1395w–21 et seq.) of subchapter XVIII of chapter 7 of Title 42, The Public Health and Welfare. Section 1859 of the Act is classified to section 1395w–28 of Title 42. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables. PRIOR PROVISIONS A prior section 138 was renumbered section 140 of this title. AMENDMENTS 2004—Pub. L. 108–311, § 408(a)(5)(A)–(D), substituted ‘‘Medicare Advantage’’ for ‘‘Medicare+Choice’’ wher- ever appearing in section catchline, headings, and text. Subsec. (c)(2)(C)(i). Pub. L. 108–311, § 408(a)(5)(E), sub- stituted ‘‘Medicare Advantage MSAs’’ for ‘‘Medicare+Choice MSAs’’. Subsec. (f). Pub. L. 108–311, § 408(a)(5)(F), substituted ‘‘Medicare Advantage MSAs’’ for ‘‘Medicare+Choice MSA’s’’. 2000—Subsec. (b). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted ‘‘an Archer MSA’’ for ‘‘a Ar- cher MSA’’ in introductory provisions. Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(3)], sub- stituted ‘‘Archer MSA’’ for ‘‘medical savings account’’ in introductory provisions. Subsec. (f). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(6)], substituted ‘‘Archer MSAs’’ for ‘‘medical savings accounts’’ in heading. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 105–33, title IV, § 4006(c), Aug. 5, 1997, 111 Stat. 334, provided that: ‘‘The amendments made by this sec- tion [enacting this section, amending sections 220 and 4973 of this title, and renumbering former section 138 of this title as section 139 of this title] shall apply to tax- able years beginning after December 31, 1998.’’ § 139. Disaster relief payments (a) General rule Gross income shall not include any amount re- ceived by an individual as a qualified disaster relief payment. (b) Qualified disaster relief payment defined For purposes of this section, the term ‘‘quali- fied disaster relief payment’’ means any amount paid to or for the benefit of an individual— (1) to reimburse or pay reasonable and nec- essary personal, family, living, or funeral ex- penses incurred as a result of a qualified dis- aster, (2) to reimburse or pay reasonable and nec- essary expenses incurred for the repair or re- habilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster, Page 620 TITLE 26—INTERNAL REVENUE CODE § 139 (3) by a person engaged in the furnishing or sale of transportation as a common carrier by reason of the death or personal physical inju- ries incurred as a result of a qualified disaster, or (4) if such amount is paid by a Federal, State, or local government, or agency or in- strumentality thereof, in connection with a qualified disaster in order to promote the gen- eral welfare, but only to the extent any expense compensated by such payment is not otherwise compensated for by insurance or otherwise. (c) Qualified disaster defined For purposes of this section, the term ‘‘quali- fied disaster’’ means— (1) a disaster which results from a terroristic or military action (as defined in section 692(c)(2)), (2) a federally declared disaster (as defined by section 165(i)(5)(A)), (3) a disaster which results from an accident involving a common carrier, or from any other event, which is determined by the Secretary to be of a catastrophic nature, or (4) with respect to amounts described in sub- section (b)(4), a disaster which is determined by an applicable Federal, State, or local au- thority (as determined by the Secretary) to warrant assistance from the Federal, State, or local government or agency or instrumen- tality thereof. (d) Coordination with employment taxes For purposes of chapter 2 and subtitle C, quali- fied disaster relief payments and qualified dis- aster mitigation payments shall not be treated as net earnings from self-employment, wages, or compensation subject to tax. (e) No relief for certain individuals Subsections (a), (f), and (g) shall not apply with respect to any individual identified by the Attorney General to have been a participant or conspirator in a terroristic action (as so de- fined), or a representative of such individual. (f) Exclusion of certain additional payments Gross income shall not include any amount re- ceived as payment under section 406 of the Air Transportation Safety and System Stabilization Act. (g) Qualified disaster mitigation payments (1) In general Gross income shall not include any amount received as a qualified disaster mitigation payment. (2) Qualified disaster mitigation payment de- fined For purposes of this section, the term ‘‘qualified disaster mitigation payment’’ means any amount which is paid pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (as in effect on the date of the enactment of this subsection) or the National Flood Insurance Act (as in effect on such date) to or for the benefit of the owner of any property for hazard mitigation with re- spect to such property. Such term shall not in- clude any amount received for the sale or dis- position of any property. (3) No increase in basis Notwithstanding any other provision of this subtitle, no increase in the basis or adjusted basis of any property shall result from any amount excluded under this subsection with respect to such property. (h) Denial of double benefit Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed (to the person for whose benefit a qualified dis- aster relief payment or qualified disaster miti- gation payment is made) for, or by reason of, any expenditure to the extent of the amount ex- cluded under this section with respect to such expenditure. (Added Pub. L. 107–134, title I, § 111(a), Jan. 23, 2002, 115 Stat. 2432; amended Pub. L. 109–7, § 1(a), Apr. 15, 2005, 119 Stat. 21; Pub. L. 110–343, div. C, title VII, § 706(a)(2)(D)(iv), Oct. 3, 2008, 122 Stat. 3922; Pub. L. 115–141, div. U, title IV, § 401(a)(41), (b)(10)(A), Mar. 23, 2018, 132 Stat. 1186, 1202.) Editorial Notes REFERENCES IN TEXT Section 406 of the Air Transportation Safety and Sys- tem Stabilization Act, referred to in subsec. (f), is sec- tion 406 of Pub. L. 107–42, which is set out as a note under section 40101 of Title 49, Transportation. The Robert T. Stafford Disaster Relief and Emer- gency Assistance Act, referred to in subsec. (g)(2), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, which is classi- fied principally to chapter 68 (§ 5121 et seq.) of Title 42, The Public Health and Welfare. For complete classi- fication of this Act to the Code, see Short Title note set out under section 5121 of Title 42 and Tables. The date of the enactment of this subsection, referred to in subsec. (g)(2), is the date of enactment of Pub. L. 109–7, which was approved Apr. 15, 2005. The National Flood Insurance Act, referred to in sub- sec. (g)(2), probably means the National Flood Insur- ance Act of 1968, title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, which is classified principally to chapter 50 (§ 4001 et seq.) of Title 42, The Public Health and Wel- fare. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of Title 42 and Tables. PRIOR PROVISIONS A prior section 139 was renumbered section 140 of this title. AMENDMENTS 2018—Subsec. (c)(2). Pub. L. 115–141, § 401(b)(10)(A), substituted ‘‘section 165(i)(5)(A)’’ for ‘‘section 165(h)(3)(C)(i)’’. Pub. L. 115–141, § 401(a)(41), substituted ‘‘a federally’’ for ‘‘federally’’. 2008—Subsec. (c)(2). Pub. L. 110–343 amended par. (2) generally. Prior to amendment, par. (2) read as follows: ‘‘a Presidentially declared disaster (as defined in sec- tion 1033(h)(3)),’’. 2005—Subsec. (d). Pub. L. 109–7, § 1(a)(2)(A), sub- stituted ‘‘qualified disaster relief payments and quali- fied disaster mitigation payments’’ for ‘‘a qualified dis- aster relief payment’’. Subsec. (e). Pub. L. 109–7, § 1(a)(2)(B), substituted ‘‘, (f), and (g)’’ for ‘‘and (f)’’. Subsecs. (g), (h). Pub. L. 109–7, § 1(a)(1), added subsecs. (g) and (h). Page 621 TITLE 26—INTERNAL REVENUE CODE § 139B Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–343 applicable to disasters declared in taxable years beginning after Dec. 31, 2007, see section 706(d)(1) of Pub. L. 110–343, set out as a note under section 56 of this title. EFFECTIVE DATE OF 2005 AMENDMENT Pub. L. 109–7, § 1(c)(1), Apr. 15, 2005, 119 Stat. 22, pro- vided that: ‘‘The amendments made by subsection (a) [amending this section] shall apply to amounts re- ceived before, on, or after the date of the enactment of this Act [Apr. 15, 2005].’’ EFFECTIVE DATE Pub. L. 107–134, title I, § 111(c), Jan. 23, 2002, 115 Stat. 2433, provided that: ‘‘The amendments made by this section [enacting this section and renumbering former section 139 as section 140 of this title] shall apply to taxable years ending on or after September 11, 2001.’’ SAVINGS PROVISION For provisions that nothing in amendment by section 401(b)(10)(A) of Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title. § 139A. Federal subsidies for prescription drug plans Gross income shall not include any special subsidy payment received under section 1860D–22 of the Social Security Act. (Added Pub. L. 108–173, title XII, § 1202(a), Dec. 8, 2003, 117 Stat. 2480; amended Pub. L. 111–148, title IX, § 9012(a), Mar. 23, 2010, 124 Stat. 868.) Editorial Notes REFERENCES IN TEXT Section 1860D–22 of the Social Security Act, referred to in text, is classified to section 1395w–132 of Title 42, The Public Health and Welfare. AMENDMENTS 2010—Pub. L. 111–148 struck out second sentence which read as follows: ‘‘This section shall not be taken into account for purposes of determining whether any deduction is allowable with respect to any cost taken into account in determining such payment.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–148, title IX, § 9012(b), Mar. 23, 2010, 124 Stat. 868, as amended by Pub. L. 111–152, title I, § 1407, Mar. 30, 2010, 124 Stat. 1067, provided that: ‘‘The amend- ment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2012.’’ EFFECTIVE DATE Section applicable to taxable years ending after Dec. 8, 2003, see section 1202(d) of Pub. L. 108–173, set out as an Effective Date of 2003 Amendment note under sec- tion 56 of this title. § 139B. Benefits provided to volunteer fire- fighters and emergency medical responders (a) In general In the case of any member of a qualified vol- unteer emergency response organization, gross income shall not include— (1) any qualified State and local tax benefit, and (2) any qualified payment. (b) Denial of double benefits In the case of any member of a qualified vol- unteer emergency response organization— (1) the deduction under 164 shall be deter- mined with regard to any qualified State and local tax benefit, and (2) expenses paid or incurred by the taxpayer in connection with the performance of services as such a member shall be taken into account under section 170 only to the extent such ex- penses exceed the amount of any qualified payment excluded from gross income under subsection (a). (c) Definitions For purposes of this section— (1) Qualified State and local tax benefit The term ‘‘qualified state and local tax ben- efit’’ means any reduction or rebate of a tax described in paragraph (1), (2), or (3) of section 164(a) provided by a State or political division thereof on account of services performed as a member of a qualified volunteer emergency re- sponse organization. (2) Qualified payment (A) In general The term ‘‘qualified payment’’ means any payment (whether reimbursement or other- wise) provided by a State or political divi- sion thereof on account of the performance of services as a member of a qualified volun- teer emergency response organization. (B) Applicable dollar limitation The amount determined under subpara- graph (A) for any taxable year shall not ex- ceed $50 multiplied by the number of months during such year that the taxpayer performs such services. (3) Qualified volunteer emergency response or- ganization The term ‘‘qualified volunteer emergency re- sponse organization’’ means any volunteer or- ganization— (A) which is organized and operated to pro- vide firefighting or emergency medical serv- ices for persons in the State or political sub- division, as the case may be, and (B) which is required (by written agree- ment) by the State or political subdivision to furnish firefighting or emergency medical services in such State or political subdivi- sion. (Added Pub. L. 110–142, § 5(a), Dec. 20, 2007, 121 Stat. 1805; amended Pub. L. 116–94, div. O, title III, § 301(a), (b), Dec. 20, 2019, 133 Stat. 3175; Pub. L. 116–260, div. EE, title I, § 103(a), Dec. 27, 2020, 134 Stat. 3040.) Editorial Notes AMENDMENTS 2020—Subsec. (d). Pub. L. 116–260 struck out subsec. (d). Text read as follows: ‘‘This section shall not apply with respect to taxable years beginning— ‘‘(1) after December 31, 2010, and before January 1, 2020, or