IRS Rules that Homeowners Won’t Have to Pay Additional Taxes for Subsidized Replacement of Lead Pipes
Milwaukee, WI – The Internal Revenue Service issued a formal ruling this week that property owners will not be asked to count the subsidies they receive for replacing lead pipes as income when filing federal income taxes, or need to file amended tax returns if their lead service line was already replaced. Milwaukee Water Works has never notified customers that they may be expected to report their subsidy as income, but the absence of clarity on the issue at the federal level caused confusion for some property owners.
Milwaukee Water Works praised the ruling and the National League of Cities for their advocacy
“With this ruling from the IRS, homeowners can be confident that the benefits of any subsidized replacement of their lead service line will not incur any tax liabilities,” said Water Works Superintendent Patrick Pauly. “We’re pleased that the IRS has brought long-sought clarity to this issue and commend the National League of Cities for their advocacy on behalf of property owners.”
Milwaukee Water Works recently announced that the vast majority of lead service line replacements will be fully subsidized. Previously, the City of Milwaukee and Milwaukee Water Works paid about 80% of the cost for each replacement.
The additional taxes could have amounted to $1,000 per household, according to the National League of Cities. With municipalities prioritizing replacements among low-income and other disadvantaged groups, many of the property owners who will receive or have received financial assistance to replace lead service lines are not in a position to pay additional taxes.
On Tuesday, Michael Gleeson and Carolyn Berndt of the National League of Cities federal advocacy team met with the IRS Chief Counsel’s Office to argue that lead service line replacement should be excluded from income.
In Announcement 2024-10, issued Tuesday, the IRS agreed, stating in part, “The replacement of lead service lines…does not result in income to the residential property owners under § 61 of the Internal Revenue Code.”
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.
More about the Lead Crisis
- Baldwin Delivers $850,000 to Reduce Lead in Schools and Childcare Facilities Throughout Wisconsin - U.S. Sen. Tammy Baldwin - Aug 29th, 2024
- Baldwin Delivers Over $83 Million to Replace Lead Pipes, Expand Access to Safe Drinking Water - U.S. Sen. Tammy Baldwin - May 2nd, 2024
- Congresswoman Gwen Moore Statement on Milwaukee Designation as Workforce Hub - U.S. Rep. Gwen Moore - Apr 26th, 2024
- Biden Announces Milwaukee As New “Workforce Hub” For Lead Pipe Removal - Jeramey Jannene - Apr 25th, 2024
- Senator Baldwin Delivers Nearly $2 Million to Keep Wausau Families Safe from Lead Contamination - U.S. Sen. Tammy Baldwin - Apr 12th, 2024
- IRS Rules that Homeowners Won’t Have to Pay Additional Taxes for Subsidized Replacement of Lead Pipes - Milwaukee Water Works - Feb 29th, 2024
- Milwaukee Makes It Far Easier To Replace Your Lead Service Line - Jeramey Jannene - Dec 18th, 2023
- Congresswoman Gwen Moore Praises Biden Administration Effort to Remove Lead Pipes in 10 Years - U.S. Rep. Gwen Moore - Nov 30th, 2023
- Biden-Harris Administration Announces Partnership with 10 Wisconsin Communities to Accelerate Lead Service Line Replacement as Part of Investing in America Agenda - U.S. Environmental Protection Agency - Nov 2nd, 2023
- Evers, DNR Announce $402 Million Funding to Improve Local Drinking Water - Henry Redman - Oct 24th, 2023
Read more about Lead Crisis here