Researcher: RP Page 1 4/12/21
OLR Bill Analysis
sHB 5722
AN ACT ALLOWING A PERSONAL INCOME TAX DEDUCTION FOR
STIPENDS PAID TO VOLUNTEER FIREFIGHTERS AND
VOLUNTEER AMBULANCE MEMBERS.
SUMMARY
This bill establishes a personal state income tax deduction of up to
$900 for certain payments volunteer firefighters and emergency
medical services (EMS) personnel receive for their service. The
deduction applies to “qualified payments,” which federal law defines
as any payment provided by a state or political subdivision for services
performed as a member of a “qualified volunteer emergency response
organization” (i.e., a volunteer organization that is organized,
operated, and required to provide firefighting or EMS services in the
state or political subdivision).
Under federal law, individuals who receive these qualified
payments may exclude them from their gross income for federal tax
purposes, up to a maximum of $600, beginning with the 2020 tax year;
they may also exclude certain state or local tax benefits they received
for their volunteer service (see BACKGROUND). Because the starting
point for Connecticut’s income tax is an individual’s federal adjusted
gross income, any federal exemption from gross income automatically
applies to Connecticut’s income tax unless state law provides
otherwise.
Under the bill, the deduction applies to any qualified payments that
are included in the taxpayer’s gross income for federal income tax
purposes. In other words, the bill’s state income tax deduction applies
in addition to any deduction the taxpayer received for federal income
tax purposes. The maximum deduction amount applies regardless of
the taxpayer’s filing status.
EFFECTIVE DATE: January 1, 2022, and applicable to tax years 2021HB-05722-R000378-BA.DOCX
Researcher: RP Page 2 4/12/21
beginning on or after that date.
BACKGROUND
Federal Deduction for Volunteer Firefighters and EMS Personnel
Beginning with the 2020 income year, eligible taxpayers may
exclude from their federal gross income any income tax or property tax
rebate or reduction provided to volunteer firefighters and EMS
personnel by a state or political subdivision. They may also exclude
any payment provided by a state or political subdivision on account of
services performed as volunteer firefighters or EMS personnel, up to a
maximum of $600 per year (26 U.S.C. § 139B).
Connecticut Property Tax Relief
State law allows municipalities to provide by ordinance property
tax relief to specified volunteer emergency personnel, including
volunteer firefighters and emergency medical technicians and
paramedics. The relief may consist of either (1) an abatement of
property taxes due for any fiscal year (up to $1,500 in FY 21 and up to
$2,000 for FY 22 and thereafter) or (2) an exemption applicable to the
assessed value of real or personal property up to an amount equal to
$1 million divided by the mill rate in effect at the time of assessment
(i.e., up to $1,000) (CGS § 12-81w).
Related Bill
HB 6420 (File No. 57), favorably reported by the Planning and
Development Committee, increases the maximum property tax
exemption municipalities may provide to eligible volunteer emergency
personnel from $1,000 to $2,000.
COMMITTEE ACTION
Public Safety and Security Committee
Joint Favorable Substitute
Yea 24 Nay 0 (03/24/2021)