Washington, May 23, 2005 -

Today, U.S. Representative John R. Carter (TX-31) praised the House passage of H.R. 1499, Heroes Earned Retirement Opportunities Act. The legislation amends the Internal Revenue Code, making Individual Retirement Accounts available to our troops.

As co-sponsor of the bill, Carter said "The men and women who fight for our rights and freedoms, deserve the same rights and freedoms all Americans enjoy. They should have the right and freedom to save their hard earned money however they want."

Under current law, troops may not save in an IRA. Contributions to an IRA are limited to the lesser of $4,000, in 2005, or the individual’s taxable compensation. Since combat pay is tax-free, members of the military, who receive combat pay as their only source of compensation, are not allowed to contribute to an IRA because their taxable compensation is zero.

This legislation would treat tax-free combat pay as taxable compensation for the purpose of making annual IRA contributions starting in 2005.