Gold Star military families, those who’ve lost fathers and husbands, mothers and wives, defending our nation, got an unexpected slap in the face from the new tax law.
The classification of survivors’ benefits changed to a higher tax rate. Everyone involved admits it was a mistake, but it’s costing the families real money.
A bipartisan group of lawmakers is working to fix the unintended tax increase. They have introduced the Gold Star Family Tax Relief Act, which would correct the unintended consequences of the Tax Cuts and Jobs Act of 2017.
Their loved ones made the ultimate sacrifice and now lawmakers say a mistake by Congress is harming families of fallen soldiers.
Democratic Virginia Senator Mark Warner says, “They deserve our sympathy and gratitude, not an unfair tax increase thanks to a congressional screw-up.”
Senator Warner says the tax cuts and jobs act made major changes to the tax system which is negatively impacting benefits for military families whose loved ones were killed in action.
He adds, “The federal government is now taxing gold star family “survivor benefits” at outrageously high rates.”
Senator Warner says previously, Gold Star Families paid an average of 12 to 15 percent in taxes for survivor benefits. But due to recent changes in tax laws, benefits going to children can now be taxed up to 37 percent.
Lawmakers say some military families are being forced to pay hundreds if not thousands more in taxes.
Republican Senator Tom Cotton says that’s wrong and “the gold star family tax relief act” will help make things right.
He explains, “Ensure that gold star families primarily gold star widows and widowers who are receiving a survivor benefit sometimes put in their children’s name will not have the tax rates adversely affected.”
Under the bill, benefits for gold star families would be taxed as earned income. Instead of the higher trust or parent tax rate.
Despite political battles over other issues, sponsors of the bi-partisan bill say this legislation is a top priority.
Senator Cotton says, “We hope that will move in a prompt fashion.”
Senator Warner adds, “And do right by our gold star families before the next tax season starts.”
As a retroactive bill, the Gold Star Family Tax Relief Act would refund Gold Star families who were taxed the higher rate, going back as far as December 31st, 2017.