You can deduct money donated to charity but not the value of your time – even if you can put a dollar figure on it.
That, according to Rep. Dave Loebsack (D-IA), ought not be the case for all volunteers. This month, Rep. Loebsack, together with Rep. David McKinley (R-WV), introduced H.R. 5811, Volunteer Emergency Responders Tax Deduction Act, which would allow volunteer emergency worker a federal income tax deduction for their time.
Under the terms of the bill, volunteers who perform ‘qualified services’ – defined as fire fighting and prevention services, emergency medical services, ambulance services, civil air patrol, and emergency rescue services – would be allowed to claim $20 per hour for time spent performing those services as a charitable deduction. The total amount claimed could not exceed 300 hours in any taxable year.
This is a marked change from current law which specifically excludes volunteer time from charitable deductions no matter the capacity. According to Rep. Loebsack, the old law doesn’t reflect economic reality. Chief Philip C. Stittleburg, Chairman of the National Volunteer Fire Council explained how the bill would benefit taxpayers, noting that “[t]he services donated by volunteer emergency response personnel are valued at more than $140 billion annually and the average responder donates services worth more than $18,000 each year.” Allowing a charitable deduction for those services could result in increased staffing in volunteer public safety agencies. Considering that the purpose of many public charities is the replacement of government services (in other words, saving tax dollars), it’s a clever idea.
The problem, as you can imagine, is that the bill would reflect a sizable shift in tax policy. While no one would argue with the value of services provided by volunteer fire fighters (volunteer firefighters provided the entirety of emergency fire and rescue services in my hometown for years), some may question why the bill is limited to firefighters. They may wonder why the bill couldn’t be extended further – to include, for example, professionals like doctors, nurses and lawyers who offer volunteer services. That shift in policy is likely to present a challenge for Rep. Loebsack.
Rep. Loebsack sees the bill as a response to demand and staffing. He notes that in his home state, for example, “[o]ver 90% of Iowa’s firefighters are volunteers.” The bill would be, he claims, “an important recruitment tool for Fire Departments to maintain the level of staffing that they need to do their jobs.”
The bill, which was introduced on December 9, 2014, just before Congress recessed for the year, currently sits in the House Committee on Ways and Means. Based on previous legislative patterns, govtrack.us predicts that the bill, as is, has a 2% chance of getting out of committee and a 1% chance of being passed. Representatives McKinley and Loebsack intend re-introduce the bill when Congress reconvenes.

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Author

Kelly Erb is a tax attorney and tax writer.

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