H.R. 5905: Helping Our Heroes Act

This bill, known as the Helping Our Heroes Act, aims to amend the Internal Revenue Code to allow for a charitable deduction specifically for services rendered by volunteer firefighters and emergency medical and rescue personnel. Here is a breakdown of the main components of the bill:

1. Charitable Deduction for Volunteer Services

The bill introduces a new provision under Section 170 of the Internal Revenue Code. It treats volunteer services performed by individuals as a charitable contribution. Here’s how it works:

• Valuation of Services: Each hour of qualified service that a bona fide volunteer provides will be valued at $20 for the purpose of the deduction. This means if a volunteer serves 10 hours, they could potentially claim a deduction of $200.
• Limitations: An individual can only claim deductions for a maximum of 300 hours of service in a taxable year. This translates to a potential maximum deduction of $6,000 per year.
• Bona Fide Volunteer Definition: To qualify as a bona fide volunteer, an individual must receive only limited compensation, which can include reimbursement for expenses or reasonable benefits, but not a salary or wage for the service performed.

2. Definition of Qualified Services

The bill specifies what constitutes "qualified services" for volunteers. These include:

• Fire fighting and prevention services
• Emergency medical and rescue services
• Ambulance services
• Civil air patrol operations
• Search and rescue services
• Any training related to the above services required by the organization

3. Verification Requirement

The deduction must be verified in accordance with guidelines that will be established by the Secretary of the Treasury. This adds an administrative layer to ensure that claimed deductibles are legitimate and appropriately accounted for.

4. Inflation Adjustment

Starting in the year 2026, the $20 per hour deduction rate will be subject to inflation adjustments. This adjustment will be determined based on the cost-of-living index, which means that the value may increase over time to keep up with inflation.

5. Exclusion for Members of Congress

Services performed by individuals who are serving as Members of Congress will not be eligible for these deductions during their time in office. This provision ensures that those who are compensated as lawmakers do not benefit from this specific deduction.

6. Application of Deductions for Non-itemizers

The bill also revises Section 63(b) of the Internal Revenue Code to accommodate individuals who do not itemize their deductions on their tax returns. This change enables them to claim all contributions made through voluntary service as a deduction, making it easier for those who take the standard deduction to benefit from their volunteer work.

7. Effective Date

The provisions set forth in this bill would become effective for taxable years starting after December 31, 2025, establishing a timeline for when these changes would take effect.

Relevant Companies

None found.