Senators offer tax bill aimed at helping first responders

Senators offer tax bill aimed at helping first responders
© Greg Nash

A bipartisan group of senators offered legislation this week to ensure that first responders' injury-related compensation is tax exempt.

The introduction of the bill by Sens. Steve DainesSteven (Steve) David DainesLand conservation tax incentives should inspire charitable giving, not loopholes Montana governor visiting Iowa amid talk of possible 2020 bid Will Senate GOP try to pass a budget this year? MORE (R-Mont.), Christopher CoonsChristopher (Chris) Andrew CoonsTrump got in Dem’s face over abortion at private meeting: report Live coverage: Trump delivers State of the Union Actor Chris Evans meets with Democratic senators before State of the Union MORE (D-Del.) and Bob CaseyRobert (Bob) Patrick CaseyGOP wants to pit Ocasio-Cortez against Democrats in the Senate Biden speaking to Dems on Capitol Hill as 2020 speculation mounts: report GOP senators: Trump should not declare border emergency during State of the Union MORE Jr. (D-Pa.) coincides with National Police Week.

“If these men and women are injured while performing their life-saving work, the last thing we should do is tax the benefits that their families receive," Coons said in a news release.

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Under IRS guidance issued in 1985, service-related disability compensation isn't subject to federal income taxes. The senators' bill would codify the guidance's principles, since many first responders and some IRS auditors aren't aware of it.

“These brave men and women put their life on the line for our safety. It is our duty to make sure they are not unfairly taxed or inappropriately audited by the IRS for the sacrifices they’ve made on our behalf,” Daines said.

The legislation also would allow injury-related compensation to remain tax-exempt when first responders hit the retirement age of 65, a change from current policy.