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Tax Refunds Granted for Victims of Terrorist Attacks

New legislation (SB 219) provides for state income tax refunds to the families of those killed in terrorist attacks, announced the Franchise Tax Board (FTB).

“I am pleased that we can offer some assistance to those who have lost so much due to these atrocities,” said California State Controller and FTB Chair Kathleen Connell.

For victims who died as a result of the terrorist attacks of September 11, 2001, the anthrax incidents last year, or the Oklahoma City bombing on April 19, 1995, their California state tax liability is generally erased for the year immediately preceding the incident and all subsequent years until the year of death. In most cases, this means forgiveness of income tax for 2000 and 2001 for victims of September 11 or anthrax or forgiveness of income tax for 1994 and 1995 for the Oklahoma City bombing victims.

To claim this special forgiveness, surviving spouses or executors of the September 11 or anthrax victims may claim a refund of taxes paid by filing an amended or original tax return for 2000 at any time until April 15, 2005, and for 2001 any time until April 15, 2006. Surviving spouses or executors of those killed as a result of the Oklahoma City bombing may claim a refund of taxes paid by filing amended or original returns for 1994, 1995, and any subsequent year up to and including the year of death until September 22, 2003. To qualify for a tax refund, the victim must have paid state income taxes or had them withheld.

Survivors or executors of these “Killed In Terrorist Action” (KITA) victims should write in red on top of their amended tax return, “KITA-9/11, KITA-Anthrax, or KITA-Oklahoma City.”

California conforms to the Victims of Terrorism Tax Relief Act except for the $10,000 minimum relief payment. For more information, please refer to IRS Publication 3920, Tax Relief for Victims of Terrorist Attacks. This publication is available at the IRS' Website at www.irs.gov To reach the FTB, taxpayers can access our Website at www.ftb.ca.gov or call (800) 852-5711.