What Happens After the VCF Makes an Award: Taxes, Acceptance, and Appeals
Many 9/11 VCF claimants spend months or years focused on the process of filing, documenting, and presenting their claim. Then they find themselves surprised and uncertain when the VCF actually issues a decision. What does the decision look like? How long do you have to respond? What happens if you disagree with the award amount? Is the money taxable? Can you come back later if your health gets worse? These are some of the most common questions we receive from claimants in the post-award phase. Understanding the answers before you receive a decision (rather than scrambling after) puts you in a much better position to protect your recovery.
The Dearie Law Firm, P.C. has guided thousands of 9/11 claimants through the post-award phase of the VCF process. Here is what you need to know about a VCF award and your taxes.
How the VCF Notifies You of a Decision
When the VCF Special Master’s office issues a decision on your claim, you will receive written notice of the award amount and the basis for the calculation. The notice specifies the VCF’s determination of your economic loss and non-economic loss components. It will include the deadline for accepting or appealing the decision.
The decision letter is typically sent to your attorney of record if you are represented. It goes directly to you if you filed pro se (without an attorney). This is one of several reasons representation throughout the process (including the post-award phase) matters.
Accepting the Award
If you accept the VCF’s award, you will be required to sign a release. This release acknowledges the award and releases future claims against the VCF for the conditions included in the current award. This release is important to understand. It is not an absolute bar to ever returning to the VCF. The VCF permits amendments when new conditions are certified. But the release does resolve the current claim for the conditions currently at issue. You should not sign a release without understanding exactly what it covers and what it leaves open.
The deadline to accept or appeal is stated in the decision notice. Once you accept, payment is processed. This typically takes a matter of weeks.
Appealing the Award
If you believe the VCF’s award is incorrect (either in the economic loss calculation, the non-economic loss assessment, or both) you have the right to appeal. The appeal is reviewed by a different VCF staff member or hearing officer. It gives you the opportunity to present additional evidence, correct errors in the VCF’s calculation, or argue that a certified condition was assessed at too low a severity level.
Appeals are not guaranteed to increase an award. In some cases a poorly prepared appeal can introduce issues that work against the claimant. Having an attorney prepare and present the appeal is strongly advisable. Common grounds for appeal include:
- Errors in the income replacement calculation (incorrect base period, incorrect wage figures)
- Failure to adequately account for a certified condition’s severity
- Incorrect offset calculations (particularly for workers’ comp or disability pension amounts)
- Failure to account for future economic losses adequately
The appeal window is limited. Typically it is a defined number of days from the date of the decision notice. Do not let this deadline pass.
Are VCF Awards Taxable?
This is one of the most common post-award questions. The answer, generally, is no. VCF awards are treated as compensation for personal physical injuries. Under Section 104 of the Internal Revenue Code, damages received for physical injuries or physical sickness are excluded from gross income. This applies to both economic loss and non-economic loss components of a VCF award.
However, there are nuances. If you received interest on an award, that interest portion may be taxable. If any portion of the award compensates for economic losses that were previously deducted (such as certain medical expenses), that portion may be taxable. For the overwhelming majority of VCF claimants, the award is not subject to federal income tax. But you should confirm with your tax advisor based on your specific situation. We are not tax counsel, and this is general information only.
What If You Develop a New Condition After the Award?
Accepting a VCF award does not permanently close your case if a new condition develops. The VCF’s amendment process allows claimants to return and file an additional claim when a new eligible condition is certified by the WTC Health Program after the original award was issued. This is one of the most important features of the VCF for cancer claimants. Their conditions can progress, or they may develop new cancers years after a prior award.
The key requirement is that the new condition must be certified by the WTC Health Program before it can form the basis of a VCF amendment. If you have been certified for a new condition since your original award, speak with a VCF attorney about whether an amendment is appropriate.
Contact The Dearie Law Firm for a Free Consultation
If you have received a VCF decision and are uncertain whether to accept it, appeal it, or what it means for your future, call The Dearie Law Firm, P.C. for a free consultation. We help 9/11 claimants at every stage of the VCF process. Including after an award has been issued.