Tax season is here, and many U.S. fire fighters could see meaningful changes to their federal tax returns this year thanks to the advocacy of the IAFF.
Recent legislation, such as H.R. 1, has made major changes to the tax code, including new deductions for overtime pay, expanded tax breaks for seniors, and other provisions that may benefit members.
Here are some of the changes IAFF members need to know about as they prepare their 2025 returns:
Reduced Taxes on Overtime
- H.R. 1 provides a new federal tax deduction of up to $12,500 (or $25,000 for joint filers) on overtime pay for individuals earning up to $275,000 (or $550,000 for couples). This provision applies to all hours worked beyond the 53-hour per week threshold for fire fighters established by the Fair Labor Standards Act (FLSA) – meaning a majority of IAFF members who earn overtime pay will benefit from this change.
- In practice, these deductions will vary based on collective bargaining agreements, total household income, applicable state laws, and other individual circumstances. The IAFF strongly recommends that members consult a tax advisor in their state for guidance on how to best utilize this new provision.
Increase to the State and Local Tax (SALT) Deduction
- H.R. 1 raised the cap on the state and local tax (SALT) deductions from $10,000 to $40,000. The IAFF played a key role in securing this provision, which will significantly benefit members in high-tax states like New York, California, New Jersey, Massachusetts, Virginia, and Illinois.
Tax Changes for Seniors and Retirees
Seniors will notice multiple new provisions impacting their federal taxes this year, including:
- A new, stand-alone tax deduction of up to $6,000 for retirees aged 65 and older with income up to $175,000 (or $250,000 for couples). This comes in addition to increased Social Security benefits secured by the IAFF with the repeal of the WEP and GPO.
- An expansion of the HELPS Program, which allows retired fire fighters to use up to $3,000 pre-tax pension dollars to pay for health insurance and long-term care insurance premiums.
Other tax changes IAFF members should know about
While not all tax changes are specific to the fire service, serveral additional provisions may apply to IAFF members and their families.
- Congress increased the federal child tax credit to $2,200 per child, helping offset the cost of childcare, education, and other expenses.
- H.R. 1 included a new tax credit for car loan interest. Eligible filers may deduct up to $10,000 annually in interest paid on loans for new, personal vehicles that are made in the U.S.
For a full explanation about the tax code changes enacted by H.R. 1, visit irs.gov.
The IAFF urges all members to speak with a qualified tax professional for specific guidance on their individual tax filings.
