Tax Blog

HEROES Act of 2020 – Possible Tax Holiday for First Responders and Medical Professionals Working the

On April 3, 2020 Congressman Bill Huizenga has introduced and new tax bill focused on “say[ing] thank you” to our first responders and medical professionals during this time of crisis. The act, appropriately titled the Helping Emergency Responders Overcome Emergency Situations (HEROES) act, will apply to medical professionals and first responders working in counties with at least one positive COVID-19 patient. First responders and medical professionals will include: “law enforcement officers, corrections officers, firefighters, EMT’s, paramedics, pharmacists, nurses, nurse practitioners, physician assistants, hospital and licensed medical facility support staff, and senior care facility staff during the coronavirus outbreak.”

These individuals will qualify for a four-month federal income tax holiday, with an extension period of three months at the determination of the Secretary of Treasury that the COVID-19 pandemic is an “ongoing” emergency. This means, the wages earned during the “tax holiday” period will not be subject to federal income tax for up to $50,000 of their gross income during the four-month period. If the extension is enacted, the $50,000 limit will be increased by $12,500 for each month of the extension. The HEROES Act is similar to the process and laws allowing members of the military serving in combat zones to be exempt from federal income tax. The Bill itself is very short and in the preliminary stages of the legislative process. Below is the full text of the HEROES Act

A BILL

To provide an exclusion from gross income for certain

qualified first responders.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Helping Emergency Responders Overcome Emergency Situations Act of 2020’’ or as the ‘‘HEROES Act of 2020’’.

SEC. 2. EXCLUSION FROM GROSS INCOME FOR CERTAIN QUALIFIED FIRST RESPONDERS.

(a) IN GENERAL.—For purposes of the Internal Revenue Code of 1986, gross income shall not include specified income of any qualified first responder.

(b) LIMITATION.—The aggregate amount not included in the gross income of any individual by reason of subsection (a) shall not exceed $50,000.

(c) QUALIFIED FIRST RESPONDER.—For purposes of this section, the term ‘‘qualified first responder’’ means any individual who—

(1) is a physician (as defined in section 1861(r)(1) of the Social Security Act), nurse, pharmacist, law enforcement officer, corrections officer, firefighter, emergency medical technician, or paramedic, that provides services in a county that has at least one confirmed case of COVID-19, or

(2) provides services in a licensed medical or care facility which is located in such a county.

(d) SPECIFIED INCOME.—For purposes of this section, the term ‘‘specified income’’ means—

(1) if the services described in subsection (c) are provided as an employee, the wages (as defined in section 3121(a) of the Internal Revenue Code of 1986 determined without regard to paragraph (1) thereof) received by the qualified first responder for the applicable period, and

(2) in any other case, the income of the qualified first responder which is properly allocable to the 5 services described in subsection (c) which are provided by such qualified first responder during the applicable period.

(e) APPLICABLE PERIOD.—For purposes of this section, the term ‘‘applicable period’’ means the period beginning on February 15, 2020, and ending on June 15, 2020.

(f) EXTENSION.—The Secretary of the Treasury (or 12 the Secretary’s delegate) may extend the applicable period for a period not to exceed 3 additional calendar months if the Secretary (or the Secretary’s delegate) determines that the emergency related to COVID-19 is likely to be ongoing during such period.. If such period is so extended, the dollar amount in subsection (b) shall be increased by $12,500 for each month of such extension (and a like rate of increase with respect to any extension which is not a whole number of months).

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