The bill amends New Jersey's unemployment compensation law to exempt volunteer first responders from coverage, specifically introducing provisions that exclude from gross income any amounts received for their emergency services. This change aims to acknowledge the contributions of volunteer first responders and ensure that their service does not adversely affect their financial situation regarding unemployment benefits. The bill also clarifies that these volunteers will not be classified as employees if their stipends are below a certain threshold, thus preventing their compensation from triggering Fair Labor Standards Act regulations.

Additionally, the bill introduces a new legal definition for "volunteer first responder," which includes volunteer firefighters and members of emergency squads, and ensures that stipends or clothing allowances received by these individuals are not subject to unemployment insurance taxes or included in their gross income for tax purposes. This legislative change is intended to support municipalities in attracting emergency service volunteers by alleviating the tax burden associated with their stipends, ultimately enhancing the availability of emergency services for residents. The provisions will take effect immediately, with the tax exemption for stipends applying to taxable years beginning after January 1 of the year following its enactment.