BY RANDY GADDO
As Americans prepare to observe Memorial Day to honor service members killed in service to the nation, lawmakers are attempting to walk back a law that inordinately taxed families who lost a loved one in battle.
At a time when it appears politicians can’t agree on anything, a bi-partisan group of senators has passed a bill to reverse a previous law that significantly raised taxes on Gold Star children’s benefits by rates as high as 37 percent. The Gold Star Family Tax Relief Act passed unanimously Tuesday.
A similar bill (HR 2481) is receiving bi-partisan support in the U.S. House of Representatives and would classify such survivor benefits as earned income, significantly reducing the tax burden.
When U.S. service members are killed in action, their families are unwillingly initiated into an association of people who have experienced the same life-changing event; they become a Gold Star family. The name started during World War I when families of U.S. service members displayed a banner with a gold star if their service member died in battle; the tradition continues today.
Lawmakers are now trying to correct a consequence of the 2017 Tax Cuts and Jobs Act.
Alabama Democratic Sen. Doug Jones explained the Gold Star family taxation issue actually stemmed from an earlier law he called the military “widow’s tax.”
“Most of you have heard me talk about my bill to repeal the military widow’s tax, which prevents surviving spouses from receiving their full DOD (U.S. Department of Defense) and VA (U.S. Department of Veterans Affairs) survivor benefits at the same time,” he said. The bill’s official name is the Military Widow’s Tax Elimination Act of 2019 (S 622). “That bill actually has just reached a record number of cosponsors in the Senate.”
He went on to explain that due to the widow’s tax issue, many military families sign their DOD annuity policies over to their children. However, the Tax Cuts and Jobs Act of 2017 significantly raised taxes on Gold Star children’s benefits. Gold Star families didn’t realize this until they got their 2018 tax bills.
“One family I heard about was hit with a surprise $5,400 tax bill for 2018. The year before it was only $1,100,” the senator noted.
Joining Sen. Jones were Bill Cassidy, R-La., Amy Klobuchar, D-Minn., Pat Toomey, R-Pa., Mark Warner, D-Va., Chuck Grassley, R-Iowa, Ron Wyden, D-Ore., Angus King, I-Maine, and 21 other bipartisan senators.
“Gold Star families have sacrificed so much for our nation, and passing this legislation to remove the exorbitant tax on surviving children’s benefits is the least we can do,” said Jones, a member of the Senate Armed Services Committee. “We can never truly thank these families enough for the sacrifices that they have made, but we can do everything in our power to honor and care for them. I am proud to have the bipartisan, unanimous support of the entire Senate in passing this bill … It is a first step toward honoring our commitment and making these families whole financially.”
The author retired after 20 years in the U.S. Marine Corps, followed by 15 years as a municipal director before becoming a freelance writer. He is now a frequent contributor to the Baldwin Edition of Lagniappe.
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