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11 Requirements to Become a Firefighter
~ Sarah Calams, FireRescue1 Associate Editor
 
A Factsheet on Home Fire Prevention
~ U.S. Fire Administration
 
The Relationship Between Addiction and Emergency Responders
~ Jena Hilliard, AddictionCenter.com
 
Substance Abuse Among Firefighters
~ www.TheRecoveryVillage.com
 
7 Tips On How Firefighters Can Deal With PTSD
~ Stanley Popovich
 
How to Prepare Your Bedroom for a Fire Emergency
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Make Me A Firefighter
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First Responder Resilience
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Share the Load Program
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  Taking Advantage of Federal Tax Breaks for Volunteer Firefighters  
  ~ Courtesy of www.NVFC.org  
 

In December of 2007, Congress passed legislation exempting all property tax benefits and up to $360 per year of other types of compensation that volunteer emergency responders receive as a reward for their service from being taxed as income by the federal government. In the summer of 2008, Congress passed additional legislation clarifying that volunteer benefits exempted from federal income tax were also not subject to withholding for Social Security or Medicare nor subject to other reporting requirements.

 
Thousands of volunteer firefighters and EMS responders across the country have seen their income tax bills reduced as a result of the passage of this law, but many who qualify to take advantage of the benefit have not done so because the jurisdiction that they volunteer for is unsure how to apply it. While the Internal Revenue Service (IRS) has posted information online to inform jurisdictions about the benefit, there is no form specific to volunteer emergency responder benefits that they can fill out. As a result, many local governments and fire chiefs are uneasy about claiming this benefit for their volunteers.

In an attempt to address this problem, the National Volunteer Fire Council (NVFC) has developed a set of Frequently Asked Questions (FAQ) to assist jurisdictions that are unsure about how to claim the benefit for their volunteers. The NVFC informally consulted with staff in the IRS Chief Counsel’s office in developing the FAQ’s but none of the following has been approved or endorsed by the IRS. These FAQ’s are intended to be an informational tool to assist individuals responsible for the reporting and withholding of income that volunteer emergency responders receive as a reward for their service.

Question: I’ve heard about the income tax credit for volunteer firefighters referred to as the ‘Volunteer Responder Incentive Protection Act (VRIPA).’ Is this accurate and where can I find a copy of the bill?
 
Answer: VRIPA was legislation introduced in the House and Senate in the 110th Congress, but it wasn’t enacted as a stand-alone bill. Language similar to VRIPA was inserted into H.R. 3648, the Mortgage Forgiveness Debt Relief Act, which became law on December 20, 2007. VRIPA was further clarified when H.R. 6081, the Heroes Earnings Assistance and Relief Tax Act of 2008, was enacted on June 17, 2008. Both bills can be looked up at http://thomas.loc.gov/, but the language regarding exempted volunteer emergency responder income has been posted on the NVFC’s web site at:
 
 
Question: According to the Mortgage Debt Relief Act of 2007, a ‘qualified payment’ is not to “exceed $30 multiplied by the number of months during such year that the taxpayer performs service.” Does that mean that the first $30 each month that a volunteer firefighter or EMS responder receives as a reward for their service is exempted from being taxed as income?
 
Answer: For a volunteer emergency responder that is an active member of a department for an entire year, the first $360 that they receive in compensation for their service in that year is not subject to federal income taxation, withholding, or reporting. For a volunteer emergency responder that is an active member of a department for six months out of the year, the first $180 that they receive in compensation for their service in that year is not subject to federal income taxation, withholding, or reporting. The bill does not limit the tax-free amount that an individual can receive to $30 per month; rather, it limits the tax-free amount to $30 multiplied by the number of months that the volunteer emergency responder was an active member of the department.
 
Question: According to the Mortgage Forgiveness Debt Relief Act of 2007, a ‘qualified volunteer emergency response organization’ is any volunteer organization, “which is required (by written agreement) by the State or political subdivision to furnish firefighting or emergency medical services in such State or political subdivision.” Can a volunteer emergency responder qualify for VRIPA if he or she is a member of a volunteer emergency response organization established by a government?
 
Answer: Yes. In a similar situation, the U.S. Department of Treasury concluded that:
 
“The requirement of paragraph (b)(2) of this section that a qualified volunteer fire department be required to furnish firefighting services by written agreement with the political subdivision may be satisfied by an ordinance or statute of the political subdivision that establishes, regulates, or funds the volunteer fire department.”
 
The actual ruling can be found in the Code of Federal Regulations, Title 26, Volume 2, revised as of April 1, 2003 (26CFR1.103-16). It is important to note that the ruling cited above preceded passage of VRIPA and was not specific to the section of the tax code where VRIPA resides (Sec. 139B(b)).
 
Question: In filling out a W-2 form for a volunteer emergency responder, what should be entered into Box 1?
 
Answer: No compensation in the form of property tax benefits are subject to income taxation, reporting, or withholding. Other forms of compensation paid to active members of a qualified volunteer emergency services agency should be reduced by up to $360 per year, or $30 multiplied by the number of months in which the individual was an active member of the department. For example, someone who receives a $500 annual stipend and was active for the entire year should have $140 entered into Box 1 on their W-2 form.
 
Question: In filling out a W-2 form for a volunteer emergency responder, what should be entered into Box 14?
 
Answer: For an individual that is active for 12 months out of the year, “Sec. 139B(b) $360,” for an individual that is active for 11 months out of the year, “Sec. 139B(b) $330,” etc.
 
Question:  Should Box 3 and Box 5 of a volunteer emergency responder’s W-2 form show the same amount as Box 1?
 
Answer: Yes.
 
Question: What is entered on Line 1 of a Form 941?
 
Answer: The number of volunteers receiving compensation in excess of the amount excludable under the law.
 
Question: What is entered on Line 2 of Form 941?
 
Answer: Only the amount of compensation subject to taxation, reporting, and withholding.
 
Question: Are there any other modifications necessary to make to Form 941?
 
Answer: No.





 

 
     
   
 
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