The Gold Star Family Tax Relief Act bills, (S.1370/H.R.2481) have each passed their chamber of origin. These bills, first reported in 5/17/19 will fix a 2017 tax law error affecting military families. These proposals sponsored by Sen. Bill Cassidy (La.) and Rep. Elaine Luria (VA) are intended to fix a special tax dating back to 1986 that was intended to stop wealthy parents from sheltering income by shifting it to their children with lower tax rates, inadvertently causing higher taxes on military survivor benefits. This bipartisan legislation effectively removes this provision (A.K.A. Kiddie Tax) from the special 1986 tax, resolving the unintended tax treatment of survivor benefits. Because of this mistake in the tax code, military families could now be paying a 37 percent tax rate, instead of 12 to 15 percent, on the survivor benefits. “This bipartisan legislation helps those who lost a husband or wife, a father or mother, serving in the military to protect us. This legislation fixes an unintended problem and lessens the taxes of the surviving spouse,” said Dr. Cassidy. “The Tax Cut and Jobs act has helped millions. I thank Democratic colleagues for joining to improve the law and ensure more Americans benefit.” “Gold Star Families have already paid the ultimate price, so it broke my heart when a surviving spouse from Coastal Virginia alerted me to this injustice,” Rep. Luria said. “I knew I had to fight for her in Congress to fix a broken system that should be working for her and her family.” For more information, contact Sandra at the Veterans Service Office at 602 Strong Ave on Tuesdays and Thursdays from 10am to 3pm, or call 365-3612.
Sandra G. Van Zant
Veterans County Service Officer