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.

This bill updates Pennsylvania's tax code to provide specific definitions for volunteer firefighter retirement plans and to clarify how their contributions are treated for tax purposes. It directly affects volunteer firefighters and the fire companies or municipalities that sponsor their benefit programs by distinguishing these contributions from regular taxable compensation. The legislation establishes clear rules for two types of plans: defined benefit plans, which offer a guaranteed payout, and defined contribution plans, which rely on specific deposits. By explicitly stating that these contributions are not considered compensation, the bill aims to prevent them from being taxed as income for the firefighters. These changes apply to taxable years starting on or after January 1, 2024.