Tax Benefits of Being a Volunteer Firefighter Explained

Volunteering as a firefighter is a vital service to many communities, but it often comes with personal costs. To help offset these expenses and encourage participation, governments offer various tax benefits that can reduce taxable income or provide direct credits.

Tax-Free Stipends

Many volunteer firefighters receive stipends as a token of appreciation. Under IRS guidelines, these payments can sometimes be excluded from taxable income if they are considered “nominal” compensation—generally less than 20% of a full-time firefighter’s salary in the same jurisdiction.

If stipends exceed this threshold, they may be classified as taxable wages. Some states set their own limits, so volunteers should check local regulations. Payments issued on a per-call or per-hour basis are more likely taxable, while flat-rate or periodic stipends may be non-taxable.

Reimbursable Costs

Volunteer firefighters often cover costs like fuel, training, and equipment. Many fire departments or local governments offer reimbursement programs. If reimbursements follow an accountable plan—having a clear business connection, proper documentation, and requiring excess funds to be returned—they are not taxable.

Mileage for responding to calls, attending training, or other department-related travel is commonly reimbursed. The IRS standard mileage rate for 2024 is 67 cents per mile. If a department provides a flat mileage stipend without requiring documentation, it may be taxable.

Training courses, certification fees, and continuing education expenses are often reimbursed. If not, volunteers may be able to deduct them as unreimbursed employee expenses, but only if they itemize deductions. The Tax Cuts and Jobs Act of 2017 eliminated this deduction for most taxpayers.

Credits Linked to Volunteer Fire Service

Several states offer tax credits to volunteer firefighters, reducing state income tax liability. These credits vary in amount, eligibility, and whether they are refundable or non-refundable. Refundable credits allow taxpayers to receive the full benefit even if it exceeds their tax liability, while non-refundable credits can only reduce the amount owed to zero.

Maryland provides a $7,000 state income tax subtraction for qualified volunteer firefighters. New York offers a $200 non-refundable state tax credit for active volunteers who meet service requirements. South Carolina has a tiered credit system based on years of service. Volunteers should check with their state’s department of revenue for eligibility and application procedures, as most programs require certification from the fire department.

While no federal tax credit currently exists, some municipalities offer property tax reductions for volunteer firefighters. These exemptions, administered locally, vary in percentage and eligibility but can provide significant savings.

Deductions for Gear and Supplies

Volunteer firefighters often purchase their own gear, tools, and supplies. These out-of-pocket expenses may be deductible if they are necessary for firefighting duties. Items such as protective clothing, helmets, gloves, and boots typically qualify, as do specialized tools like flashlights and utility belts.

Uniform costs may also be deductible if the clothing is not suitable for everyday wear. Turnout gear and department-mandated uniforms meet this criterion, while generic work pants or boots do not. Maintenance costs, such as dry cleaning or repairs, can also be included in deductions. Communication devices, such as two-way radios or pagers, may qualify if used exclusively for firefighting.

Recordkeeping Requirements

Maximizing tax benefits requires maintaining thorough records. Without proper documentation, volunteers may struggle to substantiate deductions, credits, or reimbursements in the event of an audit.

For deductions related to gear, supplies, or travel, volunteers should keep receipts, invoices, and bank statements showing the date, amount, and purpose of each purchase. A mileage log should detail the date, destination, purpose, and miles driven for each trip. Digital apps or spreadsheets can help streamline this process.

Service records, such as call logs or training attendance sheets, may be required for state tax credits or property tax exemptions. Fire departments often provide official documentation, but volunteers should keep personal copies.

For stipends or reimbursements, volunteers should retain pay stubs or payment records to determine taxability. If a department issues a Form 1099-NEC or W-2, it indicates the income is reportable. For reimbursements under an accountable plan, maintaining detailed expense reports with supporting receipts ensures compliance with IRS guidelines. Proper recordkeeping simplifies tax filing and helps avoid penalties for inaccurate or unsupported claims.