How to Get the NYS Volunteer Firefighter Tax Credit

The New York State Volunteer Firefighter Tax Credit serves as a financial acknowledgment for the dedicated individuals who volunteer their time and skills to fire departments across the state. This state-level benefit is a refundable income tax credit, designed to reduce a volunteer’s annual state tax liability. The program is structured to directly benefit those who commit to a full year of service. It recognizes the consistent effort required to be an active member of a fire company.

Eligibility for the Credit

To qualify for the volunteer firefighter tax credit, an individual must meet specific criteria established under New York State Tax Law. The primary requirement is that the person must have been an active volunteer firefighter for the entire tax year in question. The definition of “active” is not uniform across the state; it is determined by the fire company or department itself, often through a points-based system that tracks participation in calls, training, meetings, and other duties.

A second condition is that the volunteer must have been a resident of New York State for the entire tax year. The credit amount is set at $200 for an individual who meets these requirements. If two spouses file a joint tax return and both individually qualify as active volunteers for the full year, they can claim a combined credit of $400.

Because this is a refundable credit, the taxpayer will receive the full amount even if it exceeds their total state income tax liability. For example, if a qualifying volunteer owes $150 in state income tax, the $200 credit will eliminate that liability, and the taxpayer will receive the remaining $50 as a refund.

Required Documentation from Your Fire Company

Before a volunteer can claim the tax credit, they must secure the proper documentation from their fire company. The required proof comes in the form of a written statement or official letter issued by the fire company or department.

The statement must contain specific pieces of information to be considered valid for tax purposes. It needs to clearly state the volunteer’s full name and confirm that they were an active member for the entire tax year for which the credit is being claimed. The document must also include the legal name and official address of the fire company or department.

This written confirmation is for the volunteer’s personal records and should be stored with their other tax documents for that year. It should not be attached to the New York State tax return when it is filed. The taxpayer should only submit the document to the New York State Department of Taxation and Finance if the department specifically requests it during a review or audit process.

How to Claim the Credit on Your Tax Return

The specific form required is Form IT-245, Claim for Volunteer Firefighters’ and Ambulance Workers’ Credit. This form must be completed and submitted with the taxpayer’s annual New York State income tax return.

On Form IT-245, the taxpayer will enter their personal information and confirm their eligibility by answering a series of questions. The form requires the name and address of the fire company where the volunteer served.

The total credit amount calculated on Form IT-245 is then transferred to the main state tax return. Specifically, the amount is entered on the line designated for refundable credits. For married couples claiming the $400 credit, a single Form IT-245 is completed and filed with their joint return.

Interaction with the Volunteer Firefighters’ and Ambulance Workers’ Property Tax Exemption

A significant rule that volunteers must understand is the interaction between the state income tax credit and local real property tax exemptions. Under New York State law, a volunteer cannot receive the benefit of both the $200 income tax credit and a property tax exemption for the same volunteer service in the same tax year.

Many municipalities and school districts offer a property tax exemption of up to 10% of a home’s assessed value for qualifying volunteers. To make an informed decision, a volunteer homeowner should calculate the actual dollar savings from this potential property tax exemption. This amount should then be compared directly against the fixed $200 value of the income tax credit.

If the property tax exemption results in a tax reduction greater than $200, it would be the more valuable benefit. Conversely, if the savings from the property tax exemption are less than $200, or if the volunteer does not own property, the income tax credit is the better choice. This decision must be made annually, as the taxpayer’s financial situation or the value of the exemption could change.