Researcher: RP Page 1 3/16/22
OLR Bill Analysis
HB 5173
AN ACT ALLOWING A PERSONAL INCOME TAX DEDUCTION FOR
STIPENDS PAID TO VOLUNTEER FIREFIGHTERS AND
VOLUNTEER AMBULANCE MEMBERS.
SUMMARY
This bill establishes a 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 organized, operated, and required to
provide firefighting or EMS services for a 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. Because the starting point for Connecticut’s
income tax is an individual’s federal adjusted gross income, this federal
exemption from gross income automatically applies to Connecticut’s
income tax unless state law provides otherwise.
The bill allows individuals to deduct up to $900 in qualified
payments that are included in the taxpayer’s gross income for federal
income tax purposes (i.e., qualified payments that are taxable for federal
income tax purposes because they exceed the $600 maximum). The bill’s
maximum deduction amount applies regardless of the taxpayer’s filing
status.
EFFECTIVE DATE: January 1, 2023, and applicable to tax years
beginning on or after that date.
BACKGROUND
Federal Deduction for Volunteer Firefighters and EMS Personnel 2022HB-05173-R000027-BA.DOCX
Researcher: RP Page 2 3/16/22
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) a property tax abatement of up to $2,000
per fiscal year or (2) an exemption of up to $2,000 applicable to the
assessed value of real or personal property (CGS § 12-81w).
COMMITTEE ACTION
Public Safety and Security Committee
Joint Favorable
Yea 24 Nay 0 (03/03/2022)