Today, the House of Representatives passed Representative John Carter (TX-31) and Representative Rick Larsen’s (WA-02) legislation to change the tax law for Gold Star families receiving survivor benefits. The Children of Fallen Servicemembers AMT Relief Act updates the federal tax law to count Survivor Benefit Plan annuities paid to a minor beneficiary as earned income, so the payment would not fall under the Alternative Minimum Tax. The legislation was included within a larger package, H.R. 1994 the SECURE Act.

“We’ve heard the heartbreaking stories of Gold Star families forced to pay exorbitant taxes on survivor benefits because they’ve been treated as unearned income,” Rep. Carter said. “This language will right an unfortunate wrong, and ensure that in the wake of a tragedy, military families are not facing additional tax burdens. These families have lost a loved one, and it’s the federal government’s responsibility to honor that sacrifice. I’d like to sincerely thank my friend, Congressman Larsen, for his partnership on this incredibly important issue to our military families.”

“Today the House of Representatives stood up for children of fallen servicemembers. Survivor benefits are not unearned income, but earned through sacrifice and loss,” said Rep. Larsen. “This bipartisan fix to the tax code honors the sacrifices of servicemembers by treating their families fairly.”

The Alternative Minimum Tax (AMT) was designed so that wealthy families would not be able to avoid paying taxes, but it’s had unintended consequences when it comes to families of fallen service members receiving annuities from the Uniformed Services Survivor Benefit Plan. In recent cases, taxable Survivor Benefit Plan income was subjecting grieving families to the higher tax rates under AMT, because it is treated as unearned income.

Rep. Carter represents Texas District 31, which includes Fort Hood, the largest active duty armored military installation in the free world. He serves as co-chairman of the Congressional Army Caucus and Ranking Member of the Military Construction and Veterans Affairs Subcommittee on Appropriations.

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