News
Focus on Recruitment and Retention: Volunteer Responder Incentive Protection Act Exempts Certain Volunteer Benefits from Federal Taxation
IRS Publishes Guidelines for VRIPA Implementation
In December 2007, the Volunteer Responder Incentive Protection Act (VRIPA) was signed into law, prohibiting the federal government from taxing any property tax benefits and up to $360 per year of any other type of benefit provided to volunteers firefighters and EMS personnel by a state or local unit of government. Passage of VRIPA was a top priority for the National Volunteer Fire Council (NVFC) in the 110th Congress. The NVFC has been working closely with the Office of Congressman John Larson (D-CT), the author of the original VRIPA legislation, to ensure that the new law is implemented in a manner that reflects the intent of Congress and the letter of the law.
Language was included in the Heroes Earnings Assistance and Relief Tax (HEART) Act, which was signed into law on June 17, clarifying that those benefits exempted from federal gross income are also exempt from social security and Medicare (FICA) tax. Since passage of the HEART Act, the Internal Revenue Service has posted instructions explaining the new tax benefits and how volunteers can take advantage of them.
Some states and many local units of government have discovered that providing benefits to volunteer first responders helps them boost recruitment and retention. Volunteer benefits come in various forms, including length of service award programs (pension-like programs for volunteer first responders), various tax and fee reductions, small cash payments for emergency calls responded to, and reimbursement for expenses incurred. The federal government has historically taxed these benefits as income, reducing their incentive value to volunteers and creating administrative problems for state and local units of government.
VRIPA is in effect for the tax years 2008-2010. At its annual fall meeting in Grand Rapids, MI, the NVFC adopted a resolution calling on Congress to extend VRIPA beyond 2010 and increase the ceiling on tax-free benefits for volunteer first responders from $360 to $600 per year.
If you have any questions about VRIPA, the HEART Act, or anything involving the new tax benefits for volunteer emergency responders, please contact Dave Finger, NVFC Director of Government Relations, at (202) 887-5700, ext. 12 or dfinger@nvfc.org.
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Kimberly Ettinger
Director of Communications
202-887-5700 ext. 19
David Finger
Director of Government Relations
202-887-5700 ext. 12