| Home |
Articles | Proposed Bill to Relieve Tax Burden for Families of Fallen Servicemembers
|
Proposed Bill to Relieve Tax Burden for Families of Fallen Servicemembers
May 11, 2010
Senator Richard Burr (R-NC) this week introduced the Children of Fallen Warriors
AMT Relief Act, legislation that protects children from paying disproportionate
taxes on the benefits they receive after the death of a parent who has served in
the military.
"Our nation's servicemembers and their families have sacrificed enough on our
behalf without then being subjected to the alternative minimum tax on their
survivor's benefits. That is why I am proud to introduce the Children of
Fallen Warriors AMT Relief Act, which will remove the punitive burden that is
currently imposed on the children of our fallen heroes by the Alternative
Minimum Tax," Sen. Burr said.
When it was created, the Alternative Minimum Tax (AMT) was designed to target
a few hundred wealthy Americans whose tax benefits resulted in their paying
little or no federal income tax. However, since it has not been adjusted
to the rate of inflation, it has now expanded to include millions of Americans
it was never intended to affect. As a result, Congress is frequently required to
pass relief bills.
Under the current system, some children who receive an annuity from the
Uniformed Services Survivor Benefit Plan (SBP) could be subject to a punitive
AMT. This unintended consequence can cost the children as much as 26% of
their benefit.
The bill introduced today corrects the problem by re-classifying the payout
for children from the SBP as earned income, and therefore subject to normal
taxation rules for wages rather than the higher taxation rate for the AMT.
| 
Overview - CSRS
