The House of Representatives unanimously passed bill H.R. 6081, the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008. The chief sponsor of the bill was Rep. Charles B. Rangel (D-NY).
The revised HEART Act (previous versions of the bill have already passed the House and Senate) would allow thousands of active duty military families to receive a stimulus check they were previously denied because a spouse did not have a valid Social Security number. Under the current economic stimulus plan, taxpayers cannot receive a rebate if one spouse does not have a valid Social Security number; an ITIN is not sufficient. The revised bill only applies to military families.
The bill accomplishes a number of other things for active and retired military, including:
– Making permanent the ability to include combat pay as earned income for purposes of the Earned Income Tax Credit (EITC);
– Making permanent the expiring Internal Revenue Code provision that permits active duty reservists to make penalty-free withdrawals from retirement plans;
– Permitting recipients of military death benefit gratuities to roll over the amounts received, tax-free, to a Roth IRA or an Education Savings Account;
– Providing a tax credit for small employers with respect to wages paid to employees who are on active military duty; and
– Permitting members of the reserves called to active duty to withdraw amounts held in a Flexible Spending Account (FSA) without penalty.
I’d love to hear your thoughts on this. Is it fair for active military to get special tax treatment – such as allowing them to receive a tax rebate when other taxpayers in a similar position may not?
And then take it a step further… What should the criteria for special tax treatment be? Should it extend to other folks who put their lives on the line – what about police officers and fire fighters? Who is a hero, really?
Sometimes its best to back up and look at the big picture (especially when one – like me – doesn’t understand all the details of the situation.)
First, the name alone (H.R. 6081, the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008) sends the needle on my BS detector in the red. Sounds like someone spent WAY too much time trying to get political capital from applying a red, white and blue bandaid on a serious problem.
Second, why not focus on the fundamental neglect of veterans that is a national embarrassment – and fix the system – instead of complicated tax credits rife with exceptions. This seems like four more rolls of red tape to wind around the poor men and women who temporary survived military service, not knowing they were in for a lifelong battle of bureaucracy.
It is about time some inequities were corrected by Congress. Good example of when compication is made more complicated, deserving folks get left out. I agree with Sean, fix the system, be it veterans and /or the tax system.
I’m holding out for a Gyros…