Allegheny Township to give firefighters who are residents a $300 wage tax credit

Allegheny Township is allowing its volunteer firefighters and EMS personnel an earned income tax credit of $300.

The supervisors had to determine what level of tax relief they will provide to the members of the Markle and Allegheny Township fire companies under the state's Act 172 before they could advertise an ordinance to enact it.

Act 172 allows municipalities to grant local tax relief to active volunteer fire company members as a way to reward, maintain and attract volunteers who provide critical emergency services to the community.

Under the law, a municipality can provide a tax credit of up to 20 percent of the real estate tax levied on a volunteer's residence or a flat credit to reduce the earned income tax, also commonly referred to as the wage tax.

Financial impact discussed

In discussing the Act 172 credit, Township Manager Greg Primm said he inquired with Berkheimer and Associates, Allegheny Township's tax collection agency, about how much of a credit municipalities are providing. He said the answer was an average of about $200.

Supervisors Chairman Kathy Starr said she thought $200 was too low. She said she read in the newspaper that several local communities had decided on the $300 credit.

As for the financial impact, Primm said, “If it's $200 and you have 20 people from each department eligible — and that's high — it would cost us $8,000. If it is $300, it would cost $12,000.”

“I think our firefighters are worth it,” she said of the $300 credit.

Her fellow board members, Rennick Steele and Joe Ferguson agreed to the $300 credit without hesitation.

“That means they could make up to $60,000 and have all their earned income tax to the township forgiven?” Starr asked.

Primm said that is correct.

“If all your taxes will be paid as normal, it will come as a refund,” he said.

Primm said the next step regarding the ordinance is determining eligibility guidelines.

He will meet with officials from both fire companies to do that before the ordinance is presented for the approval by the supervisors in January.

Tax credit for 2017 in the works

He said active firefighters would be able to claim the credit against their 2017 taxes.

But to do that, they must wait until the ordinance is approved before filing their 2017 tax returns.

Primm said the one snag the township faces regarding the tax credit is being able to grant it to township residents who volunteer at fire companies in neighboring municipalities and residents of other communities who volunteer with the Allegheny Township fire companies.

He said the law limits the exemption to just those firefighters and EMS personnel who live and volunteer in the community enacting the credit.

According to Primm, North Hills area communities resolved that problem by doing it through their Council of Governments, with volunteers in every COG member community receiving the same exemption after the member communities agreed to it.

He said he will contact neighboring communities in the coming months in an attempt to take the same approach locally.

Tom Yerace is a Tribune-Review contributing writer.