Daines’ bill would provide tax relief to injured first responders

U.S. Sen. Steve Daines (R-MT) on May 2 sponsored a bipartisan bill to certify that America’s first responders don’t have to pay taxes on disability payments received from any on-the-job injuries.

“Montana’s first responders risk their lives every day to protect our communities,” Sen. Daines said last week. “This legislation will ensure these brave men and women will no longer endure unfair taxes or audits from the IRS as a result of the sacrifices they have made for our safety.”

Sen. Daines introduced the bipartisan Putting First Responders First Act, S. 1278, with U.S. Sen. Jon Tester (D-MT) and two other Democrats to clarify that the current tax code would ensure injured first responders do not pay taxes on injury-related compensation.

Sen. Daines said S. 1278 was inspired by Ladd Paulson, a now retired Billings, Mo., police officer who was hit in 2002 by an impaired driver as he conducted a traffic stop. Paulson sustained severe injuries and following the accident, the Internal Revenue Service (IRS) audited him consecutively for five years because he didn’t file taxes on treatment for his injuries. Paulson continues to receive letters from the IRS, according to the senator.

If enacted, S. 1278 would amend the Internal Revenue Code of 1986 to allow first responders to continue to exclude service-connected disability pension payments after reaching the age of retirement, according to the congressional record.

The bill has been referred for consideration to the U.S. Senate Finance Committee.