SEPTIC Act

The SEPTIC Act proposes to make financial assistance received by homeowners from state or local governments for certain wastewater management improvements tax-free. It would amend current tax law to exclude from taxable income any direct or indirect subsidy provided to a resident for the purchase or installation of wastewater management measures on their primary residence. These measures are defined as installations or modifications primarily designed to manage wastewater, such as septic tanks and cesspools. This change means homeowners would not have to pay federal income tax on such financial aid.