Minister Shea highlights new tax credit for volunteer firefighters

Kensington, Prince Edward Island, July 6, 2011… The Honourable Gail Shea, Minister of National Revenue, today visited the Kensington Fire Station on Gerald McCarville Drive to promote a new non-refundable tax credit for volunteer firefighters announced in the 2011 federal budget.

"Every day in Canada, almost 85,000 brave men and women are ready to put their own lives at risk to protect the lives and property of their friends, neighbours, and even perfect strangers. Our Government recognizes these efforts and is proud to have introduced the Volunteer Firefighter's Tax Credit," said Minister Shea.

The non-refundable tax credit is available to any volunteer firefighter who serves at least 200 hours per year at one or more fire departments beginning on January 1, 2011. Services that make up those 200 hours include responding to and being on call for firefighting and other emergencies, attending meetings at the fire department, and taking courses in preventing and putting out fires. When an eligible firefighter claims the credit, they can reduce income taxes they have paid or will owe at tax time by as much as $450.

"This credit is one of several measures announced in Budget 2011 that will help Canadians and their families to keep hard-earned dollars in their pockets. I encourage all volunteer firefighters to learn more about the credit and to claim it when they file their 2011 income tax and benefit returns."

Volunteer Firefighter Tax Credit (VFTC)

1. What is the new Volunteer Firefighter Tax Credit (VFTC)?

For 2011 and subsequent years, the budget proposes a new non-refundable tax credit, based on an amount of $3,000, for certain volunteer firefighters.

2. I am a volunteer firefighter. Do I qualify for the VFTC?

To qualify for the new credit, you must meet the following conditions:

• you must be a volunteer firefighter in the year; and
• you must complete a minimum of 200 hours of eligible volunteer firefighter services with one or more fire departments in the year.

However, if you were also engaged by the same fire department (other than as a volunteer) for the same or similar duties, you cannot include any hours related to that department in determining if you have met the 200-hour threshold.

A certification from a fire chief or delegated official within the fire department may be requested to verify the number of hours of eligible volunteer firefighter services you performed for the department.

3. What are eligible volunteer firefighter services?

Eligible services include:

• responding to and being on call for firefighting and related emergency calls as a firefighter;
• attending meetings held by the fire department; and
• participating in required training related to the prevention or suppression of fire.

4. I am currently a volunteer firefighter. Do my hours of service completed since January 1, 2011 count towards the 200-hour threshold?

Yes.

5. How is the VFTC calculated?

The VFTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2011) by $3,000. For 2011, the non-refundable credit will be $450.

6. I received a payment for my duties as a volunteer firefighter. Do I still get the VFTC?

As a volunteer firefighter, you may be eligible for an income exemption of up to $1,000 if you received a payment from a government, municipality, or other public authority for carrying out volunteer firefighter duties. If you choose to claim this exemption, you will not be eligible for the new VFTC.

7. I am eligible for a $1,000 exemption related to the payment I received for carrying out volunteer firefighter duties. Is this exempt income reported on my T4 information slip?

For 2011 and subsequent years, the income exemption related to volunteer firefighter duties will be identified on your T4 information slip.

8. How will I claim the VFTC?

Beginning with the 2011 personal income tax and benefit return, a new line will be incorporated into the Schedule 1, Federal Tax to allow you to claim the credit.

9. Where can I get more information about this new tax credit?

The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web pages often. All new forms, policies, and guidelines will be posted as they become available.

Above information links : News Release  www.cra.gc.ca/firefighter

July 2011