EAST PALESTINE — With personal injury payments from the $600 million derailment settlement beginning to trickle in, a bill that makes any derailment-related compensation tax exempt is headed to President Joe Biden’s desk.

The Federal Disaster Tax Relief Act of 2023 recently passed Congress and awaits the president’s signature. Once signed into law, the legislation will be retroactive and apply to derailment relief payments — any assistance or benefits received from Norfolk Southern through the Family Assistance Center, the railroad directly or any federal, state, or local government agencies to help residents in Ohio and Pennsylvania recover from the rail disaster — received after Feb. 3, 2023 and includes claim awards as part of the $600 million settlement.

The bill, introduced by Rep. Gregory Steube (R-FL) on Oct. 2, 2023, will also make compensation non-taxable for residents impacted by victims of hurricanes and wildfires. It passed the House unanimously last May.

U.S. Sen. Sherrod Brown (D-OH) has been pushing for passage of the bill since January. Brown, who helped negotiate the tax deal with Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Jason Smith (R-MO), was hopeful it would make it to the Senate by the beginning of the tax filing season, but the bill lagged.

The Village of East Palestine and Ohio moved quickly to ensure any derailment assistance was nontaxable at the respective levels. Ohio made the first move in July of 2023 when State Rep. Monica Robb Blasdel (R-Columbiana County) secured a deduction for taxpayers impacted by the East Palestine derailment from state income tax. Robb Blasdel pushed for these amendments into the state budget, which was approved by the General Assembly and signed into law. East Palestine Village Council passed a resolution last April making any derailment assistance from Norfolk Southern exempt from income tax in the village.

While the passage of the Federal Disaster Tax Relief Act is welcomed by those still recovering from derailment, most derailment benefits were already made tax exempt as the IRS declared in June that the rail disaster was “catastrophic in nature,” excluding derailment-related relief as income under Section 139 of the IRS tax code.