Volunteer Responder Incentive Protection Act Introduced in the House of Representatives
March 17, 2017
Use NVFC Legislative Action Center to ask your Representative to co-sponsor the bill
On March 15, 2017, Representatives Dave Reichert (R-WA), John Larson (D-CT), and a bi-partisan group of 30 other original cosponsors introduced the Volunteer Responder Incentive Protection Act (H.R. 1550), which exempts property tax benefits and up to $600 per year in other incentives that volunteer firefighters and EMS personnel receive as a reward for their service from being subject to federal income tax and reporting.
“On behalf of the National Volunteer Fire Council (NVFC), I’d like to thank Representatives Reichert, Larson, and all of the cosponsors for introducing this important legislation, which will help local emergency response agencies recruit and retain volunteer fire, EMS, and rescue personnel,” said National Volunteer Fire Council (NVFC) Chair Kevin D. Quinn. “On average a volunteer firefighter in the United States donates services worth more than $18,000 to the community that he or she serves every year. It is common sense to clarify that the nominal incentives that some volunteers receive in recognition of their service should not be taxed by the federal government.”
The National Fire Protection Association (NFPA) estimates that the value of services provided by volunteer firefighters in the United States is nearly $140 billion annually. Without those donated services many communities would be unable to provide emergency services protection at all while others would be forced to raise taxes to pay salaries and benefits for full- or part-time staff.
Unfortunately, many emergency services agencies are finding it increasingly difficult to recruit and retain the next generation of volunteers. As jobs leave small towns and young people move to cities and suburbs in search of work, there are fewer people available in smaller and rural communities to volunteer as emergency responders. Additionally, as training requirements and call volumes continue to rise, the time commitment necessary to serve as a volunteer emergency responder has ballooned.
In order to bolster recruitment and retention, many fire and EMS agencies provide benefits, including non-monetary gifts, reductions in property taxes or other fees, per-call payments, stipends, and/or retirement benefits. Most volunteers view benefits as a form of reimbursement for the money that they spend out of their own pocket to serve. However, the IRS has determined that volunteers who receive benefits should be treated as employees of the departments that they serve for tax purposes.
This has created a significant amount of confusion for volunteer fire departments, which do not view themselves as employers or their volunteers as employees. Volunteer fire departments throughout the country have been audited and even fined thousands of dollars for failure to report or improper reporting of benefit amounts, sometimes as small as a few hundred dollars per year per volunteer. Concerns over becoming the target of an IRS investigation only add to the significant burden that having to process tax paperwork and withholding for dozens of volunteer emergency responders imposes on small communities that may not employ anyone or have administrative staff.
Passing VRIPA would allow agencies to provide minor benefits without having to worry about being audited by the IRS. It would also enhance the incentive value of volunteer benefits by allowing individuals to keep the entire amount. Use the NVFC’s Legislative Action Center to contact your U.S. Representative to ask them to cosponsor H.R. 1550.