EAST PALESTINE, Ohio — Some East Palestine residents received a 1099 for money distributed from Norfolk Southern as part of its reimbursement program following its train derailment last year. Some of that money could be taxable under current law.

“I lost my job,” said Cindy Davies, who lives less than a mile from the derailment site.

She used to work at Ceramfab, which is located within the derailment site and had to permanently close. Norfolk Southern gave her money to cover lost wages.

She came to a workshop put on in partnership with Norfolk Southern to understand more about the taxes she might have to pay on that money.  

“How to file so we don’t have to pay the taxes on the monies we received. We shouldn’t have to,” said Davies.  

As current law stands, anyone who received money from Norfolk Southern wouldn’t have to pay local or state income taxes, but they could be on the hook for federal taxes.

“Just because a 1099 had an amount of money on it doesn’t necessarily mean that all it is taxable. It means it’s reportable,” said Tim Petrey, a tax expert who led the workshop on taxes. "There’s a lot of payments that people received where the amount of money showing up on their 1099 is not actually taxable."

Under current federal law, the lost wages, inconvenience fee and rent paid by Norfolk Southern for things like equipment storage are the only taxable items on the 1099.

A bill has already passed in the House and is waiting in the Senate that would completely eliminate any taxes for reimbursement on 1099s put out by Norfolk Southern.

President Biden said on his visit to the village that he supports this legislation.

Until that decision is made, it leaves people like Davies in limbo.

“Hopefully they will pass it and it won’t take too much time and they will get this resolved before April deadline,” said Davies.