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Author: JeanDavid Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121598  
Subject: Is this taxible income, Federal and State. Date: 11/21/2013 9:30 PM
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I own a house in New Jersey that I live in. It used to have a 1000 gallon oil tank buried on the property to fuel my hot water heating boiler. In 2009 I had the tank removed and I converted my heating fuel to gas in hopes that it would be gone before it started to leak. But I was too late. Removing the tank was relatively cheap. But remediation will cost almost $50,000.

The state is so determined to get these underground oil tanks removed that the DEP will pay around $2,500 for you to remove one, and an almost $50,000 grant for any remediation needed. The amount of the grant cannot exceed the actual documented cost of the remediation. And if I have too much money (I don't) I would not qualify for the grant. Now, a little over 4 years later, the state has come up with the money and just sent me the check for about $2,500, with about $47,000 more to come as I submit the proper bills. Now that check was issued, not by the DEP, but by the New Jersey Economic Development Authority, whatever that means.

Am I going to have to pay Federal income tax on this money? Perhaps I will get some 1099 form for it? Or since the money just passes through me to the remediation contractor, is it handled some other way?

Similarly for my state income tax?
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