Statement From Suffolk County Executive Steve Bellone

Suffolk County Executive Steve Bellone today released the following statement after United States Senator Charles Schumer (D-NY) declared that the IRS should not consider voluntary septic upgrades as personal income. 

“Suffolk County’s historic Septic Improvement Program was carefully and purposely designed so that installation companies, and not homeowners, receive the grant funding and report those disbursements to the IRS as income.” said County Executive Bellone. “The program was designed to protect homeowners who decide to do their part to improve water quality from any potential tax liability. Since the installation companies are all reporting the grant income they receive as income and are paying taxes on that income, the County is optimistic that the IRS will confirm that grants should not be considered taxable income to homeowners.”

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On Background

Earlier this year, Suffolk County Comptroller John Kennedy directed his staff to issue IRS income reporting forms to homeowners who had participated in the County’s historic SIP program, despite the fact that those homeowners had never received funds from the County, and taxes on the income are already being paid by companies that install nitrogen reducing septic systems.

Suffolk County’s Water Quality Czar, along with homeowners, County Legislators, environmental advocates, and industry leaders have called on Suffolk County Comptroller John Kennedy to rescind income tax liability forms issued by his office to homeowners who voluntarily installed new nitrogen reducing septic systems under a County grant program.  The Suffolk Septic Improvement Program (SIP), which replaces outdated and environmentally-damaging residential septic systems with nitrogen-eliminating ones, has attracted rightful interest of homeowners, but now many of those same homeowners are dropping out of the program because of confusion and worry tied directly to their pockets. The Suffolk Septic Improvement Grant Program (SIP) provides contractors with state and county grants to install nitrogen-reducing septic systems for participating homeowners in an effort to reduce nitrogen pollution in the region. The grants range in value from $10,000 to $20,000 and are awarded to companies installing and designing the septic systems.

To date, the Suffolk County Septic Improvement Program has received:

·         1731 Total Applicants

·         6 Withdrawn Applications with more considering since IRS issue emerged

·         396 Issued Grants

·         102 Installations to date

·         121 Pending Installations in potential jeopardy