An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for definitions and for classes of income.

PRIOR PRINTER'S NO. 1500 PRINTER'S NO. 1714
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1306
Session of
2025
INTRODUCED BY FLEMING, KERWIN, HILL-EVANS, PIELLI, MARCELL,
KHAN, CIRESI, SANCHEZ, MADSEN, KUZMA, BOROWSKI, FREEMAN,
DONAHUE, STENDER, CERRATO, GREEN AND WATRO, APRIL 28, 2025
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, MAY 14, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in personal income tax, further providing for
definitions and for classes of income.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 301 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended by
adding definitions to read:
Section 301. Definitions.--Any reference in this article to
the Internal Revenue Code of 1986 shall mean the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.),
as amended to January 1, 1997, unless the reference contains the
phrase "as amended" and refers to no other date, in which case
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the reference shall be to the Internal Revenue Code of 1986 as
it exists as of the time of application of this article. The
following words, terms and phrases when used in this article
shall have the meaning ascribed to them in this section except
where the context clearly indicates a different meaning:
* * *
(f.1) "Eligible volunteer firefighter" means a person who:
(1) has been approved by the authorities in control of a
duly organized fire company or fire department as an active or
vested volunteer firefighter of the fire company or fire
department; and
(2) is actually performing service in the protection of life
and property from fire or other emergency, accident or calamity
in connection with which the services of the fire company or
fire department are required.
* * *
(s.3) "Service award" means a benefit payable to an eligible
volunteer firefighter.
(s.4) "Service award program" means a volunteer firefighter
defined benefit plan or volunteer firefighter defined
contribution plan established or maintained by a fire company,
fire department or sponsoring municipality.
* * *
(x) "Volunteer firefighter defined benefit plan" means a
program that provides to eligible volunteer firefighters a
benefit that is definitely determinable under the program and
without reference to the amount contributed to the program on
the participant's behalf or to any income, expenses, gains or
losses or forfeitures of other participants under the program.
(y) "Volunteer firefighter defined contribution plan" means
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a program that provides to eligible volunteer firefighters a
benefit as the result of definite and determinable contributions
paid to the program and without reference to any income,
expense, gains or losses or forfeitures of other participants
under the program.
Section 2. Section 303(a)(1) of the act is amended by adding
a subparagraph SUBPARAGRAPHS to read:
Section 303. Classes of Income.--(a) The classes of income
referred to above are as follows:
(1) Compensation.
* * *
(v) Contributions by a fire company, fire department or
sponsoring municipality to a taxpayer's service award as part of
a service award program shall not be considered compensation for
purposes of this article.
(V) THE FIRST FIVE THOUSAND DOLLARS ($5,000) IN
CONTRIBUTIONS BY A FIRE COMPANY, FIRE DEPARTMENT OR SPONSORING
MUNICIPALITY TO AN ELIGIBLE VOLUNTEER FIREFIGHTER'S SERVICE
AWARD OVER THE LIFETIME OF THE ELIGIBLE VOLUNTEER FIREFIGHTER'S
PARTICIPATION IN A SERVICE AWARD PROGRAM SHALL NOT BE CONSIDERED
COMPENSATION FOR PURPOSES OF THIS ARTICLE.
(VI) DISTRIBUTIONS TO AN ELIGIBLE VOLUNTEER FIREFIGHTER FROM
A SERVICE AWARD AS PART OF A SERVICE AWARD PROGRAM SHALL NOT BE
CONSIDERED COMPENSATION FOR PURPOSES OF THIS ARTICLE IF THE
ELIGIBLE VOLUNTEER FIREFIGHTER IS 65 YEARS OF AGE OR OLDER.
* * *
Section 3. This act shall apply to taxable years commencing
on or after January 1, 2025.
Section 4. This act shall take effect in 60 days.
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