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Congressman Joe Courtney

Representing the 2nd District of Connecticut

Information For Homeowners With Crumbling Foundations

A Crisis Affecting More Than Three Dozen Towns Across North-Central Connecticut

In recent years, more and more homeowners in our region have discovered that their home foundations are crumbling due to the presence of a mineral called pyrrhotite in the stone aggregate originally used to mix the concrete. During this time, I have met with affected homeowners, attended community forums, and discussed the matter with town officials and state legislators from the impacted regions. The high cost of repairs for homeowners, the prevalence of the problem in our region, and the potential economic impact to the state require a comprehensive response. I have been a persistent advocate for such a collaborative approach and I will continue to organize state and local officials, federal agencies, private industry, and other stakeholders to address this crisis head-on.


Courtney speaks to a homeowners group about crumbling foundations in 2015

 

Resources for Homeowners

 

Courtney hosts a seminar at Ellington High School with a senior certified public accountant (CPA) at the IRS, Joseph S. McCarthy, for homeowners and contractors to learn more about the IRS Casualty Loss Deduction procedures in May 2018

 

What I am Doing

On November 22, 2017, Congressman John Larson and I announced that the IRS approved our request for a "revenue procedure," a guidance document that allows homeowners with crumbling foundations to deduct the cost of repairs from their federal taxes as a casualty loss. In the months leading up to this decision, we discussed this problem with key federal officials, including former IRS Commissioner John Koskinen, National Taxpayer Advocate Nina Olson, and Secretary of the Treasury Steven Mnuchin, who made it clear that federal agencies understand the deep impact of this problem. The guidance issued by the IRS will now allow homeowners to deduct the cost of repairs made to home foundations for pyrrhotite-related damage on returns, and amended returns, moving forward. Homeowners can read the guidance here and consult with their professional tax preparer to determine whether their repairs qualify.

In August 2016, I received confirmation from the U.S. Department of Housing and Urban Development (HUD) that federal grant programs including the Community Development Block Grant and the HOME Investment Partnership program could be used to support housing remediation costs in communities affected by crumbling foundations. Connecticut already receives funding through this program annually to support housing initiatives across our state, and some of the funding has been targeted to support our region's response. I have worked extensively with local legislators, state agencies, and HUD staff to share information and assist in using this funding to alleviate the burden of crumbling foundations.

In addition to those two programs, in September 2017, the U.S. House of Representatives unanimously passed three amendments I authored along with Congressman Larson. These amendments would support our efforts with the IRS and HUD, as well as the National Institute of Standards and Technology, which could issue standards for pyrrhotite content in residential construction to help prevent a similar pyrrhotite-related problem in the future. While the amendments have not become law, this vote was the first time a chamber of the U.S. Congress expressed support for assisting Connecticut homeowners.

The response to this crisis must address the central problem of damaged homes as well as related issues, including questions regarding property-casualty policy changes, outstanding mortgage debt held by homeowners, and the impact of this problem on municipal budgets. I remain committed to investigating every possible source of federal assistance that may be available to local homeowners who need help, and I will continue my regular communications with state and local officials to develop the comprehensive solution this crisis requires. 

As the state coordinates further assistance and information for homeowners, my office is always available as a resource for eastern Connecticut constituents. Please feel free to call my office at 860-886-0139 or email me with any questions.

 

More on Information For Homeowners With Crumbling Foundations

September 15, 2018 In The News
The Connecticut Society of Certified Public Accountants is supporting the efforts of U.S. Rep. John B. Larson, D-1st District, and U.S. Rep. Joseph D. Courtney, D-2nd District, to clarify how homeowners with crumbling foundations can receive federal tax relief through the casualty loss deduction. In August, Courtney and Larson asked acting IRS Commissioner David Kautter for clarification on whether a taxpayer can take and “carry forward” a net operating loss if their casualty loss exceeds their income.
September 12, 2018 Press Release
“This clarification of the tax revenue procedure announced last year will have a major impact for homeowners whose repair costs exceed their annual income,” said Courtney and Larson. “We are grateful to have the support of the Connecticut Society of Certified Public Accountants and their Executive Director, Bonnie Stewart, in this critical matter for homeowners in northcentral and northeastern Connecticut."
August 22, 2018 In The News

VERNON — For over an hour Tuesday night, residents of three of the communities hit hardest by the crumbling concrete epidemic — Ellington, Stafford, and Vernon — registered their unanimous support for an application that could result in federal money for foundation testing.

July 20, 2018 Press Release
"Homeowners in more than three dozen towns in north central and northeast Connecticut have reported that their home foundations are failing due to the mineral pyrrhotite that could affect up to 35,000 homes in the area. That is why it is critical to make sure that all municipal, state, federal and private sector measures are taken to address this catastrophe. This week was another small step to help our constituents as two amendments passed in the House of Representatives."
May 13, 2018 Page

If you are a tax preparer in northcentral Connecticut and would like to learn more about the webinar tomorrow afternoon, please contact the Norwich district office at 860-886-0139.

What: Webinar for tax preparers to learn more about the Casulty Loss Deduciton for frumbling foundation repairs.

When: Monday, May14, 2018 at 10:00 AM

Norwich Office
55 Main Street, Suite 250
Norwich, CT 06360
Phone: (860) 886-0139
Fax: (860) 886-2974

May 12, 2018 Press Release
“While Congressman Larson and I originally announced that the IRS was going to make this tax relief available late last year, many people are still just learning about the program and the fact that it will be available until 2021,” said Courtney. “Local residents should be aware that the additional three years afforded under this updated guidance we received in February will provide critical time for to make foundation repairs and secure federal tax relief. I would like to thank the Office of the Connecticut Taxpayer Advocate and Congressman John Larson for their participation today.
February 8, 2018 In The News

By: Eric Bedner

The IRS has determined that homeowners who make repairs to their crumbling foundations within the next three years can amend their 2017 federal tax filings to deduct the cost.

Under the updated guidance from the IRS, which U.S. Reps. John B. Larson, 1st-District; Joseph D. Courtney, 2nd-District; and Rihard Neal of Massachusetts announced Wednesday, homeowners will have through the end of 2020 to make qualified repairs to their homes and until April 2021 to claim those repairs on amended 2017 federal tax return. 

February 7, 2018 Press Release
“This is welcome news for homeowners in our districts,” the members said. “The additional three years afforded under this updated policy provides critical time for more homeowners impacted by crumbling foundations to make repairs and secure federal tax relief. Since enactment of the new tax law, we have been in regular contact with officials from the Treasury and IRS to explore ways to extend as much relief as possible to homeowners in spite of the changes made by the law. We are grateful for their attention to our concerns and the support they have provided today to homeowners struggling with the damage caused by crumbling foundations.”
January 10, 2018 Press Release
“As the IRS confirmed in its letter, qualified taxpayers who paid to repair damage to their homes in 2017 or in prior open tax years will still able to deduct the cost of those repairs as a casualty loss on their 2017 returns. This is welcome confirmation for those homeowners who have already completed repair work on their homes and will soon begin to prepare their taxes,” said Courtney and Larson.

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