WASHINGTON (Nexstar) — Gold Star military families, those who’ve lost loved ones 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. Lawmakers said they want to fix the unintended consequence of the Tax Cuts and Jobs Act of 2017.
“Gold Star families have made tremendous sacrifices for our country. They deserve our sympathy and gratitude, not an unfair tax increase thanks to a congressional screw up,” said Senator Mark Warner (D- Virginia).
Senator Warner said previously Gold Star families paid an average of 12 to 15 percent in taxes for “suvivor benefits.” But due to recent changes in tax laws, benefits going to children can now be taxed up to 37 percent.
“The federal governent is now taxing Gold Star family ‘survivor benefits’ at outrageously high rates,” said Sen. Warner.
Lawmakers said some military families are being forced to pay hundreds if not thousands more in taxes. Republican Senator Tom Cotton said, “The Gold Star Family Tax Relief Act” will help make things right.
“Ensure that Gold Star families, primarily Gold Star widows and widowers, who are receiving a survivor benefit and sometimes put it in their children’s name will not have their tax rates adversely affected,” Cotton said.
Under the bill, benefits for the families would be taxed as earned income, instead of the trust or parent tax rate, which is higher. Despite political battles over other issues, sponsors of the bipartisan bill said the legislation is a top priority.
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 31, 2017.