WALLINGFORD — An increased tax break is in the works for volunteer first responders through a town-funded property tax relief program.
Under the existing agreement, volunteer firefighters, paramedics, emergency medical technicians and ambulance drivers are eligible for an annual tax abatement, the amount of which is based on years of service.
The abatement is a reimbursement payment equivalent to the reduction in property taxes.
The Town Council is slated to consider an ordinance at an upcoming meeting that would raise the abatement amount to the maximum allowed by a new state statute that was passed in June.
The Town Council ordinance committee approved a draft ordinance at its meeting Nov. 26.
In September, the ordinance committee voted to modify the existing agreement and increase the abatement amount for 2021 by $500, for a total of up to $1,500 depending on years served, and then again in 2022 by another $500, for a total of up to $2,000.
The town funds the abatement through the fire department's budget. Currently, it is funded at $25,000 with approximately $14,000 being used in recent years, town officials said. The change in the ordinance would increase that budget line item to $28,000.
The payment qualifies as income, so it’s subject to state and federal income taxes.
Town Corporation Counsel Janis M. Small said Tuesday that she examined the income tax implications, and determined that the abatement is considered taxable since an exception with the IRS at the federal level has lapsed.
The amended agreement also would extend the abatement to volunteers who live outside of Wallingford but volunteer in town by updating the definition of “volunteer” to remove the word “resident.”
Small said that in her research, she didn’t find any other towns that had interlocal agreements regarding tax abatements, and determined that one wasn’t necessary to extend the benefit to out-of-town volunteers.
“It’s not going to be a circumstance that happens a lot,” Small said, since currently only a couple volunteer firefighters live outside of Wallingford.
Councilor Craig Fishbein initially brought the issue to the town council’s attention. Fishbein, who’s also a member of the state House of Representatives for the 90th District, said Tuesday that it’s “unfortunate” that the abatement is considered taxable income, and that there was really no way around it locally.
“It’s not a local issue, it’s not a state issue, it’s a federal issue,” he said. “I don’t think it should be taxable income, and I was trying to think of ways around that.
He said that he’s otherwise happy, both with the process and the way the town was able to extend the benefit to out-of-town volunteers.
“I’m very happy we were able to resolve that,” he said. “We should support, foster and encourage (volunteer firefighters) as much as we can.”