Today the U.S. House of Representatives passed a measure by Congressman Walter B. Jones (R-NC) to permit military death gratuities to be contributed to certain tax-favored accounts. The Jones legislation – introduced as H.R. 418 – passed the House as part of H.R. 6081, the Heroes Earnings Assistance and Relief Tax Act of 2008, a bill designed to help members of the U.S. Armed Forces and their families. H.R. 6081 passed by a vote of 403 to 0 and now moves to the Senate.
“Our men and women in uniform serve this nation with great honor and distinction. Many give their lives for this country,” Congressman Jones said. “It is for this reason that I introduced legislation more than two years ago to permit military families who receive the death gratuity to invest the full amount into certain tax-favored accounts.”
A death gratuity is a $100,000 payment paid to survivors of service members whose death resulted from combat-related circumstances. Current tax law limits the amount that recipients of the death gratuity can place in tax-preferred accounts such as a Roth IRA or Coverdell Education Savings Account. This legislation would change the law to allow recipients to contribute up to the full amount of the gratuity payment to one of those accounts.
“As the families of our fallen heroes try to put their lives back together, they need help. The death of a loved one is difficult enough, without having to worry about saving the death gratuity to pay for retirement, college, or other expenses – and then have the government come in and tax the interest on that savings. This measure would help ensure that does not happen,” Jones said. “We owe it to our fallen military heroes to expand the options of families who receive the death gratuity, families who have paid the ultimate cost with the loss of their loved one.”
The need for this legislation was brought to Congressman Jones’ attention by a Marine stationed at Marine Corps Air Station New River. The Marine, who was preparing to deploy to Iraq, contacted the Congressman’s office and suggested that Congress institute this change to ease the burden on grieving military families.
H.R. 418 has received the endorsement of The Military Coalition, a group of prominent national military and veterans’ organizations that represents more than 5.5 million members plus their families.
Posted on Tuesday, May 20, 2008
by Walter Jones for Congress