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.