New law exempts incentives for volunteer first responders as taxable income this year only

The International Association of Fire Chiefs (IAFC) is cheering a win in the form of the Volunteer Responder Incentive Protection Act (VRIPA) recently passed into law, for the tax benefits it will provide to volunteer firefighters all year.

VRIPA exempts all nominal incentives for volunteer first responders — including property tax-based incentives and up to $600 in other incentives — from being considered taxable income for 2020. This protection only applies this year, however. It will lapse back into nonexistence after Dec. 31, 2020. This is a response to moves made in the mid-2000s, when the Internal Revenue Service (IRS) reclassified volunteer firefighters and EMS personnel as employees of their departments, requiring those departments to provide each with W-2 forms and the reporting of any provided incentives as a result.

“As local jurisdictions struggle to recruit and retain volunteer firefighters and EMS personnel, many local governments offer nominal recruitment and retention incentives,” Fire Chief Gary Ludwig, IAFC president and chairman of the board, said. “The incentives contained in VRIPA are helpful in defraying costs incurred by volunteers as well as displaying a community’s thanks for the volunteer’s service.”

VRIPA was ushered in under the SECURE Act, passed late last year. The IAFC now seeks a permanent version but is encouraging volunteer firefighters and fire chiefs to familiarize themselves with the new law’s temporary provisions.

The organization also notes that typical incentives for volunteer firefighters include local property tax waivers, t-shirts, and other uniform clothing, county park passes, and monetary stipends.