Patrick J. Toomey

05/21/2019 | Press release | Distributed by Public on 05/21/2019 12:16

Senate Passes Toomey’s Bipartisan Fix to Lower Taxes on Gold Star Families

Washington, D.C. - Today, U.S. Senator Pat Toomey's (R-Pa.) bipartisan legislation to provide tax relief for children who have lost a parent while serving in the military passed the Senate with unanimous support.

'The fair tax treatment of survivor benefits provided to the children of fallen soldiers isn't a matter for partisan politics. By unanimously passing our bipartisan bill today, the Senate honors those Gold Star families who led the fight to have Congress address this issue,' said Senator Toomey. 'I'm grateful that my colleagues moved swiftly to pass this measure, and hope the House passes the same bill in short order so that the president can sign it into law without delay.'

In addition to Senator Toomey, this measure was co-authored by Senators Bill Cassidy (R-La.), Doug Jones (D-Ala.), and Mark Warner (D-Va.).

'This bipartisan legislation is one step closer to helping those who lost a father or mother serving in the military to protect our freedom,' said Senate Cassidy. 'The Tax Cut and Jobs act has helped millions. I thank Democratic colleagues for joining to improve the law and ensure more Americans benefit.'

'Gold Star families have sacrificed so much for our nation, and passing this legislation to remove the exorbitant tax on surviving children's benefits is the least we can do,' said Senator Jones. 'We can never truly thank these families enough for the sacrifices that they have made, but we can do everything in our power to honor and care for them. I am proud to have the bipartisan, unanimous support of the entire Senate in passing this bill.'

'Gold Star families deserve our sympathy and gratitude, not an unfair tax increase thanks to a Congressional screw-up,' said Senator Warner. 'I'm glad the Senate has decide to fix this mistake, and hope the House will take action swiftly to ensure that Gold Star families aren't hit with a tax hike.'

The legislation was also co-sponsored by Finance Committee Chairman Chuck Grassley (R-Iowa), Ranking Member Ron Wyden (D-Ore.), and a bipartisan group of 37 other senators.

Background

Children of Gold Star families are eligible to receive Survivor Benefit Plan payments, an annuity administered by the Department of Defense that gives survivors an inflation-adjusted monthly income. Prior to 2018, these benefits were subject to the parent's tax rate, but as an unintended result of the Tax Cuts and Jobs Act, survivor benefits administered to children of fallen service members are being taxed at a rate typically used for investment income and high income families. Senator Toomey's bipartisan measure would fix this problem by taxing the child's benefits at the child's individual tax rate, rather than the estate and trust rate or their parent's rate. This bill is retroactive for tax years beginning after December 31, 2017.