USDA says it will end ‘double taxing’ of residents who got septic grants

The United States Department of Agriculture will no longer tax homeowners who received grants to install upgraded septic systems, according to U.S. Senator Chuck Schumer, who made the announcement at a press conference in Brentwood on Nov. 22.

He said the next step is getting the Internal Revenue Service to do likewise. Mr. Schumer believes the IRS will do so, since the USDA was considered a bigger challenge.

“The odds that the IRS will do it too are very, very high,” he said.

Cindy Krezel, a Brentwood resident who participated in the Suffolk County program, said she ended up paying $6,000 more in taxes and being pushed into a higher tax bracket due to the “double taxation.”

Suffolk County initiated a “Septic Improvement Program” four years ago with funding from the state, that gives grants to homeowners to cover the cost of replacing outdated and environmentally damaged residential cesspools and septic systems in attempt to reduce harmful nitrogen. But participants say the grant money they received to clean up the environment was also being taxed.

“Don’t double-tax our people for doing good for the environment,” Mr. Schumer said.

Mr. Schumer, who is the Senate majority leader, said he will pressure the IRS to make the change.

“They need me for many, many things,” he said.

The county has received 3,583 applications and there have been 1,277 installations of such innovative water treatment systems, officials said.

Adrienne Esposito, the executive director of the Citizens Campaign for the Environment, said the grant program was intended to help working class families but the double taxation undermined that goal.