The VRIPA Act continues the exclusion of $50 per month of qualified reimbursement payments for volunteer firefighters & EMS personnel from federal income tax.
Calculate the Exemption
The exclusion is calculated at up to $50 per month to a maximum of $600 for the year. If the volunteer earns less than $50 in a month than the lesser amount should be used.
Apply the Exemption
Box 1 of the volunteer’s W-2 (taxable wages) is to be reduced by the amount of the exemption. To do this in SBX payroll, you must adjust Taxable Wages in your December payroll or create a special payroll for the adjustment. The actual deduction does not need to be adjusted, only the basis. If using a special payroll, remember to include it in your 941 Worksheet and subsequent Q4 941 reporting.
Example of Applying Exemption using Advanced Payroll
Example of Applying Exemption Using Basic Payroll
Result of the Exemption
Box 1 of the volunteer’s W-2 (taxable wages) should be reduced by the amount of the exemption.