Pelosi: Veterans' Bill a Robust Effort to Reduce the Tax Burden on Military Families

WASHINGTON, May 20 /PRNewswire-USNewswire/ -- Speaker Pelosi today released the following statement on the House passing the Heroes Earning Assistance and Tax Relief Act (HEART Act), which provides permanent tax relief for military families, expands the availability of Recovery Rebates for military families, and expands homeownership opportunities for veterans.

Following the statement and available at www.speaker.gov/legislation?id=0204 is a fact sheet on the HEART Act and additional veterans' legislation that the House is considering today.

"The New Direction Congress is second to none when it comes to meeting the needs of our troops, from ensuring that they have the tools and training they need in battle to caring for them and to delivering the quality health care they need when they return home.

"Today, the House passed $1.3 billion in tax relief for military families facing significant financial hardships due to extended deployments. The bill represents a robust effort to reduce the tax burden on military families -- including helping more military families to access the Earned Income Tax Credit, offering small businesses a tax incentive to pay their National Guard and Reserve employees called up for active duty, making thousands of veterans eligible for low-interest home loans and ensuring that more military families are able to receive Recovery Rebates.

"This tax relief for military families is the least Congress can do for our troops who are putting their lives on the line every day. I look forward to the Senate passing the HEART Act and the President signing this critical legislation into law."

Putting Troops and Veterans First

The 110th Congress is taking America in a New Direction, putting our troops and veterans first. We are fighting for a landmark plan to establish a 21st Century GI Education bill (http://www.speaker.gov/legislation?id=0203) and a pay raise for our troops that exceeds the President's request. This builds on our progress of enacting the largest veterans' health care funding increase in the history of the Veterans' Administration last year (
Today, the House is building on that record of accomplishment for our veterans, taking up the HEART ACT, H.R. 6081 (http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.06081:), to make permanent essential tax relief for our military families, including tax relief under the Earned Income Tax Credit, provide incentives to make sure that reservists called up for active duty do not suffer a pay cut, clarify the availability of recovery rebates for military families, and expand homeownership opportunities for veterans.

Similar to the earlier House-passed bill, which passed 410-0, the HEART Act's $1.3 billion in tax relief for military families is a modest response to the extended military deployments in Iraq and Afghanistan that have created significant economic hardships for many of our military families. This measure represents the final agreement with the Senate that may be sent to the President by Memorial Day.

Today, the House will also consider a legislative package of bills to address the health care needs of veterans, authorize major medical facility construction projects, and provide a cost-of-living adjustment for service-connected disability compensation rates for veterans, among others.

Heroes Earnings Assistance and Relief Tax Act - H.R. 6081 (http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.06081:)

Make tax relief for families of soldiers in combat under the EITC permanent. The bill makes permanent current law to include combat pay as earned income for purposes of the Earned Income Tax Credit (EITC). At the end of the year, soldiers' families working to get into the middle class will be denied needed tax relief if combat pay is not counted for purposes of receiving the Earned Income Tax Credit.

Make sure that reservists called up for active duty do not suffer a pay cut. Provides a tax credit of up to $4,000 for small businesses who continue to pay their National Guard and Reserve employees when they are called up to serve. According to a DOD survey, 55 percent of married Guard members and reservists suffer a loss of income when being called to active duty.

Recovery rebates for military families. The bill clarifies that a military service member on active duty who files a joint return is eligible for a recovery rebate, even if their spouse does not have a Social Security number.

Make it easier for veterans to become homeowners. The bill would make thousands of veterans eligible for low-interest loans by making changes to the qualified mortgage bond programs used to help veterans achieve homeownership.

Make permanent other tax provisions to relieve economic hardships for military families. For example, the bill makes permanent IRS provisions to:

permit active duty reservists to make penalty-free withdrawals from retirement plans;

permit an employer to make contributions to a qualified retirement plan on behalf of an employee killed or disabled in combat;

count extra pay for active duty military personnel from their previous civilian employer for retirement purposes; and

permit recipients of military death benefit gratuities to roll over the amounts received, tax-free, to a Roth IRA or an Education Savings Account, among others.

The bill is supported by the American Legion, National Military Family Association, National Association of State Departments of Veterans Affairs, and the Blinded Veterans Association.

Fully paid for by going after expatriates and federal contractors going offshore seeking to avoid US taxes.

Stops tax benefits for Americans who renounce their citizenship.

The bill strengthens current law to ensure that high net-worth taxpayers cannot renounce their U.S. citizenship or terminate their U.S. residence in order to avoid U.S. taxes.

The bill would require that individuals that renounce their citizenship or terminate their long-term residency recognize income as if they had sold all of their assets on the date of expatriation. Such individuals will be required to pay taxes on income to the extent it exceeds $600,000.

Closes Offshore Tax Loopholes for Federal Contractors - H.R. 5602 (http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.05602:
This provision would close a loophole that allows government contractors, who receive millions or billions in taxpayers' dollars, to set up sham companies in foreign jurisdictions to avoid paying Social Security and Medicare taxes.

The bill would require that U.S. parent companies of subcontractors that are incorporated in tax havens pay employment taxes on behalf of U.S. employees employed by those shell companies incorporated in tax haven jurisdictions.

Defense contractor KBR, which has received millions in taxpayer dollars through its Iraq contracts, has reportedly avoided paying its fair share of Social Security and Medicare taxes by creating shell companies in the Cayman Islands.

This loophole has recently allowed the defense contractor KBR Inc. to fleece the American taxpayer by almost $100 million a year, while shirking their obligation to Americans working abroad and preventing these workers from qualifying for Social Security and Medicare.

Veterans Health Care and Cost of Living Increase

Highlights of the 10 veterans bills the House will consider today include:

Veterans Substance Abuse Treatment - H.R. 5554
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.05554:

To expand and improve health care services available to veterans from the Department of Veterans Affairs for substance use disorders -- requiring the VA to provide the full continuum of care for substance use disorders at every VA medical center. Of the approximately 300,000 veterans from Operations Enduring and Iraqi Freedom who have accessed VA health care, nearly 50,000 have been diagnosed with a substance use disorder.

http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.05856:

To authorize major medical facility projects and major medical facility leases for the Department of Veterans Affairs for fiscal year 2009.

Veterans Emergency Care Reimbursement - H.R. 3819
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.03819:

To require the Secretary of Veterans Affairs to reimburse veterans receiving emergency treatment in non-Department of Veterans Affairs facilities.

http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.05729:

To direct the Secretary of Veterans Affairs to provide comprehensive health care to children of Vietnam veterans born with Spina Bifida.

Veterans Cost of Living Increase - H.R. 5826
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.03819:

Provides a cost of living increase for veterans' disability benefits and to dependency and indemnity compensation for veterans' families, effective December 1, 2008. The cost-of-living increase is based on the cost-of-living adjustment made annually for Social Security payments.

First Call Analyst:
FCMN Contact:

Source: Office of the Speaker of the House

CONTACT: Brendan Daly or Nadeam Elshami, +1-202-226-7616, both of the
Office of the Speaker of the House

2008-05-20 18:50:00 0367193 PRNEWSWIRE