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Tax Relief for First Responders: Disability Payments Excluded After Retirement

This act allows first responders, including law enforcement, firefighters, and paramedics, to continue excluding service-connected disability payments from their taxable income even after reaching retirement age. This means that their retirement pensions or annuities, if linked to a service-connected disability, will not be counted as taxable income, potentially improving their financial well-being in retirement.
Key points
First responders (police, firefighters, EMTs) will not pay taxes on service-connected disability payments, even after retirement.
This change applies to payments previously excluded from income due to a service-connected disability.
The new rules take effect for tax years beginning after the act's enactment date, providing tangible financial benefits for eligible individuals.
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Additional Information
Print number: 117_S_1618
Sponsor: Sen. Daines, Steve [R-MT]
Process start date: 2021-05-13