“Volunteer firefighters save municipal, county, and state government taxpayers approximately $37.2 billion every year,” said NVFC Chairman Philip C. Stittleburg. “In order to retain and recruit volunteers, many local and state governments across the country provide them with modest benefits. When the federal government taxes these benefits, it diminishes and in some cases eliminates the incentive they were designed to create.”

There are a wide range of benefits that can be provided to volunteers, including pay-per-call, reimbursement for expenses, tax breaks, and pension-like plans called length of service awards. Many communities provide non-financial benefits like health club memberships or awards banquets that technically are taxable. The purpose of these benefits is to reward volunteer responders for their service, and also to give them an incentive to be a member of their local volunteer fire/EMS department.

On February 12, Congressman Larson held a roundtable discussion in Hartford, CT, at the South Windsor Volunteer Fire Department. Among the participants were Scott Potter, the NVFC’s Alternate Director from Connecticut, Ed Holohan, a benefits specialist who works with the NVFC, and Dave Finger, the NVFC’s Director of Government Relations.

“I’d like to thank Congressman Larson for introducing this important piece of legislation,” said Finger. “This isn’t just an important issue here in Connecticut but in communities all over the country that have widely varying approaches to providing incentives. H.R. 943 will provide immediate tax relief to hundreds of thousands of volunteer firefighters and EMS personnel, as well as create a tax climate that doesn’t discourage communities from providing their volunteers incentives.”

H.R. 943 was introduced with 57 original cosponsors, including 10 on the House Ways and Means Committee which has jurisdiction over the bill. In November, the National Advisory Committee of the Congressional Fire Services Institute adopted without objection a resolution introduced by the NVFC and other fire service organizations supporting the Volunteer Responder Incentive Protection Act.

“Gaps in the tax code make taxation of volunteer benefits extremely complicated,” said Holohan, an actuary who works with the NVFC on benefits issues. “Sometimes the sheer amount of paperwork involved in complying with the code makes providing benefits more trouble than it is worth. If H.R. 943 passes, not only will volunteers get to keep their benefits entirely, but more communities will see providing incentives as a viable option.”

Congressman Larson first introduced the Volunteer Responder Incentive Protection Act in the 109th Congress, after the IRS ruled that a $500 municipal property tax credit for volunteer firefighters in South Windsor, CT, was taxable income. He has made passing H.R. 943 into law his top priority for the 110th Congress. He also announced that Senator Chris Dodd (D-CT) will soon introduce companion legislation in the Senate identical to the House bill.

“Here in Connecticut, where so many towns and cities provide property tax relief for volunteer first responders, the impact of H.R. 943 will be enormous,” said Potter. “When high property taxes force people to leave a community it is unfortunate, but when volunteer fire and EMS personnel leave – and take their community service with them – it imperils public safety. Municipalities should be able to use these tax breaks as incentives without the federal government interfering.”

H.R. 943 has been referred to the House Ways and Means Committee. The NVFC urges you to contact your Representative in Congress and ask them to cosponsor H.R. 943.

Source: National Volunteer Fire Council