H.R.2279 - No Tax on Length of Service Award Programs Act; No Tax on LOSAP Act (119th Congress)
Summary
H.R.2279, also known as the "No Tax on Length of Service Award Programs Act" or the "No Tax on LOSAP Act," aims to amend the Internal Revenue Code of 1986. The bill seeks to increase the amount excluded from gross income for qualified payments to volunteer firefighters and emergency medical service providers. It also clarifies that payments under length of service award programs (LOSAPs) are considered qualified payments.
Expected Effects
The bill, if enacted, would increase the amount of qualified payments excluded from gross income for volunteer firefighters and EMS personnel from $50 to $1,000. This change would provide a greater tax benefit to these volunteers. It would also clarify the tax treatment of LOSAPs, ensuring they are recognized as qualified payments.
Potential Benefits
- Increased Financial Incentive: Volunteers would receive a larger tax break, potentially encouraging more participation in firefighting and emergency medical services.
- Simplified Tax Compliance: Clarifying the status of LOSAPs reduces ambiguity and simplifies tax filing for volunteers.
- Attracting and Retaining Volunteers: The enhanced benefits could help attract new volunteers and retain existing ones, addressing potential staffing shortages in these critical services.
- Recognition of Service: The bill acknowledges the valuable contributions of volunteer firefighters and EMS personnel.
- Support for Local Communities: By supporting volunteer services, the bill indirectly strengthens the safety and well-being of local communities.
Potential Disadvantages
- Potential Revenue Loss: Increasing the exclusion amount could lead to a decrease in federal tax revenue, although the impact may be small.
- Complexity in Implementation: The IRS may need to issue guidance to clarify the implementation of the new exclusion amount and the treatment of LOSAPs.
- Possible Abuse: There is a potential risk of abuse if the definition of qualified payments is not carefully monitored.
- Limited Scope: The bill only benefits volunteer firefighters and EMS personnel, potentially creating a perception of unequal treatment compared to other types of volunteers.
- Administrative Burden: Increased reporting and tracking may be required.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it supports essential community services like firefighting and emergency medical care. Specifically, the preamble states the goal to "promote the general Welfare". Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States. This bill modifies the tax code, which falls under Congress's enumerated powers.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).