Goldstein Tax Subtraction
NOTE: Send forms (after your squadron commander has approved) to Lt Col Jim Keohane for processing: firstname.lastname@example.org
Goldstein Tax Subtraction
Beginning in Tax Year 2015, Maryland Wing members may earn a tax benefit on their Maryland state taxes through The Honorable Louis L. Goldstein Subtraction Modification Program for Volunteer Fire, Rescue or Emergency Medical Service Personnel. This page contains information and documents related to that tax benefit.
The Maryland Wing supplement to CAPR 173-4 defining the point system, the form for certification (MWF 36), and the form for tracking activity (MWF 37) are all available through the MDWG Publications page.
Frequently Asked Questions
What is a tax subtraction?
A tax subtraction reduces your Maryland adjusted gross income and therefore reduces the amount of your income that will be taxed by the State of Maryland.
How much is the tax subtraction worth?
The Honorable Louis L. Goldstein Volunteer Fire, Rescue and Emergency Medical Services Personnel Subtraction Modification Program is a $4,500 subtraction for tax year 2017. The actual reduction to your taxes depends on your tax bracket. For example, if your marginal tax rate is 5%, a $4,500 subtraction saves you $225.
What does “LOSAP” mean?
LOSAP, or Length of Service Awards Program, is a type of tax benefit meant to reward volunteer service in emergency services. Maryland’s Louis L. Goldstein Subtraction Modification Program is an example of a LOSAP tax benefit.
Who is eligible for the subtraction?
At the end of the tax year, members are eligible for the benefit if all of the following are true. The member must:
- File a Maryland tax return
- Serve CAP in a volunteer capacity without compensation, except nominal expenses or meals
- Be active in CAP for at least 36 months in the previous 10 years; active membership during the tax year counts towards the 36 months
- Actively serve Maryland Wing during the tax year, as measured by earning 50 points in a Maryland Wing-specific program to track CAP participation
Must I be a member of Maryland Wing to claim the tax benefit?
No, but only certain non-Maryland Wing CAP members are eligible. The tax subtraction is meant to encourage volunteer service in a Maryland emergency services organization benefiting Maryland residents. The Maryland Comptroller’s office insists that, regardless of where a CAP member pays taxes, their volunteer service must be to Maryland Wing specifically in order to qualify for the subtraction, not to another wing or to a higher headquarters above Maryland Wing. With this in mind, CAP members who are NOT members of a Maryland Wing unit must satisfy at least one of the following criteria to be eligible:
- Held an official duty assignment within Maryland Wing during the calendar year as shown in eServices or on a CAPF 2a.
- Signed into a numbered mission within Maryland Wing during the calendar year (may be a training mission).
To avoid confusion, when submitting the MDF 36 to the MDWG/A1, please specify in the email why the non-MDWG member is eligible.
I am a CAP employee who also holds CAP volunteer duty positions within Maryland Wing. Can I qualify for the tax benefit?
Yes, but when you log your activity you may only log volunteer service, namely activities that are unrelated to your CAP employment and completed outside of your paid CAP work hours.
Since we started logging our activity in 2015, how do I prove that I’ve been active for 36 months in the previous 10 calendar years?
For tax years 2015 and 2016, to meet this eligibility requirement you must have been a CAP member for 36 months in the previous 10 calendar years. For example, for tax year 2015, anyone who has continuously been a member since 1 Jan 2013 meets this requirement.
Starting in tax year 2017, to meet this eligibility requirement you must have been a CAP member for 36 months in the previous 10 calendar years and show a certified MDF 36 or a MDF 37 logging 50 points of activity for 3 of the last 10 calendar years. For example, for tax year 2017 a member can show certified MDF 36’s from 2015 and 2016 plus a 2017 MDF 37 logging 50 points of activity to meet this requirement. A member who joined on 1 Jan 2015, who therefore could not qualify for the subtraction before 2017, can show three MDF 37’s for 2015-2017 each logging 50 points of activity.
I already claim this tax subtraction by volunteering with a different organization. Can I claim the subtraction for each organization I volunteer with?
No, you may only claim the benefit once per year.
I earned 49 points as a volunteer firefighter and 49 points as a CAP member. Can I combine the two?
At this time, there is no provision for combining points earned in multiple volunteer organizations.
Must I be a senior member to claim the tax benefit?
No, the tax benefit eligibility does not distinguish between senior members and cadets.
I qualify for the tax benefit but someone claims me as their dependent. Can that other person claim the benefit on my behalf?
My spouse and I each qualify for the tax benefit but file our tax return jointly. Can we claim the subtraction twice?
Yes. You must attach both of your certified MDF 36’s to your tax return.
I will not be filing a Maryland tax return for this tax year. Should I be tracking my activity?
If you anticipate filing a Maryland tax return in the future, track your activity now to prove 36 months of active CAP membership in the future.
What documentation do I need to keep?
For your tax records, keep a copy of the MDF 36 approved by your unit commander and certified by the MDWG A1. The Maryland Comptroller’s Office recommends taxpayers keep tax records anywhere from 3-7 years.
For your CAP records, keep copies of your certified MDF 36 and your MDF 37 Excel workbook for 10 years to prove in future years that you’ve been active for at least 36 months. Beyond this, keep any documentation that confirms the activities you logged on your MDF 37 in case your unit commander challenges your log. Examples include: maintaining up-to-date records in eServices showing current ES qualifications, professional development ratings, duty positions, committee assignments, and attendance at training activities; keeping copies of published press releases; and ensuring your name is recorded on CAPF 104s, CAPF 109s, mission sign-in sheets, and meeting sign-in sheets.
What is the deadline to submit my MDF 36 to Wing HQ to get certification? When will I receive the certification so I can file my taxes?
You must submit your unit-approved MDF 36 to the Maryland Wing A1 NLT 31 Jan. This allows a month for all the wing approvals to be done and returned to you NLT 28 Feb so you can get your taxes filed by 15 Apr.
Who submits the approved MDF 36 to Wing HQ?
The member is responsible for submitting the MDF 36 to MDWG HQ after the squadron commander approves it. This does not preclude the unit from developing local procedures for sending the forms to Wing HQ in batches, but ultimately it is the member’s responsibility to ensure it is sent.
Does the group commander need to approve the MDF 36?
Once a member of a squadron or flight has unit commander approval on their MDF 36, the MDF 36 can bypass the group level and be submitted directly to wing headquarters. Exceptions:
- The group commander is the unit commander who approves the MDF 36 of members assigned to group headquarters.
- Squadron commanders need group commander approval on their MDF 36 since they cannot approve their own.
- Group commanders should have the Maryland Wing Vice Commander-Forces or his designee approve their MDF 36.
I need to file my Maryland state tax return before 28 Feb. Can I get my certified MDF 36 back from wing headquarters sooner?
If you need your certified MDF 36 back from wing headquarters before 28 Feb, let the MDWG/A1 know when you need it back by. Requests to expedite processing will be handled on an individual basis.
Are there any other tax benefits of CAP membership?
Yes. Because CAP is a 501(c)(3) non-profit organization, certain contributions may be tax deductible on federal and state income tax returns. Examples of what might be tax deductible include:
- Donations to CAP
- Membership dues
- Cost of uniforms, cost of upkeep for uniforms
- Mileage, travel expenses for overnight trips, and cost of flying CAP aircraft, provided that it is not reimbursed
For additional information, please refer to the following resources and your tax professional:
Earning Points FAQ
Can I count ES training that doesn’t have a mission number?
Yes, you can count time spent at ES activities that don’t have mission numbers, for example ground sorties, base staff activities, and classroom training. For classroom training, both the students and instructors can count the time.
Why are some ES mission symbols worth more points?
The mission symbols selected for extra points represent the core emergency services missions performed by CAP that this tax benefit is meant to reward.
Can I count my travel time to/from CAP activities?
The only travel time that is expressly allowed is time spent on inbound and outbound air and ground sorties to ES missions, which can be counted in the ES category. Other travel time might be eligible for points as a collateral duty if the travel time is itself volunteer service and does not overlap with another category, for example transporting people or equipment to a CAP activity that the member will not participate in.
Separate from this tax subtraction, unreimbursed mileage and travel expenses incurred in service to CAP may be tax deductible on a member’s federal and state tax returns. Please see IRS Publication 526 for further information.
Do I get credit for CAP flying?
Crew members (e.g., pilot, observer, scanners) earn 1 point per Hobbs hour, more for certain mission symbols. Trainees, as reflected in eServices, count as crew members. Passengers who are not qualified to serve as crew members may earn points if performing some CAP duty, for example if the flight is an inbound or outbound sortie for a CAP activity.
Can I count online courses like Cadet Protection, Officer Basic Course, or specialty track tests as Professional Development activities?
Courses counted for Professional Development credit should be of equivalent scope and effort as a course like SLS or CLC. An online course such as Officer Basic Course or completing the Yeager Award does therefore count, whereas a course like Cadet Protection, Intro to CAP Safety, or a short test for a specialty track rating does not.
How many duty positions and committee assignments can I count?
You may count up to 1 duty position and 1 committee assignment for points.
I have not spent a full year in my duty assignment or committee appointment. Can I count a duty assignment or committee to which I was appointed during the tax year?
No, duty assignments and committees can only be counted on the anniversary dates of the appointment in eServices. In the event that a member switches positions before the anniversary date of the outgoing assignment, the unit commander may approve credit of the points for one of the positions.
Do I get credit for attending regular squadron meetings?
Yes, you get credit for attending any scheduled meetings. This can include video and teleconference events as well.
At our squadron meeting, we conducted ES training or another activity that can be counted elsewhere. Can I double-count it?
No, time spent at a scheduled unit meeting can either be counted towards meeting attendance or another category, but not both. ES qualifications, specialty track advancements, and radio net check-ins completed during unit meetings are not considered part of the meeting and may be counted in addition to the meeting. For example, if your squadron’s weekly meeting is devoted to ground team training and you renew your GTL during the meeting, then you earned 5 points for renewing your GTL plus you can count the time as either a squadron meeting or ES training.
What does Collateral Duty mean? What activities qualify for this?
This category is a catchall for time spent supporting CAP in capacities not covered by the other categories. Examples include participation outside of scheduled meetings in the non-ES activities of your unit or time spent repairing or improving CAP assets or real estate. Collateral duty does not include time spent performing ES duties, professional development activities, or duties required for your duty position.