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Higgins Announces Approval of Fix for Gold Star Families

May 23, 2019
Press Release
Families of Fallen Soldiers Saw Steep Tax Increase Under New Tax Law

Congressman Brian Higgins (NY-26) announced the House of Representatives approved legislation that includes a provision to fix a flaw in the new federal tax law which created steep tax increases for families of fallen servicemembers.   Higgins was among a bipartisan group leading legislation to correct the problem. 

Gold Star Families, those who have lost a loved one during service in the U.S. Armed Forces, recently saw huge spikes in how their benefits are taxed under the new policies implemented in the 2017 tax bill.  Many spouses allocate their survivor benefits to their children.  Previously those benefits were taxed at around 15%, but due to changes in the “Kiddie Tax” under the new tax bill, benefits to families are currently being taxed at up to a 37% rate.

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Higgins, who pushed for passage of the bill on the House Floor, said in part, “Our country is indebted to the selfless Americans who made the ultimate sacrifice.  No amount of financial support can ease the pain of losing a loved one, but veteran benefits to surviving spouses and children provide an important lifeline during these times of need. The 2017 tax law brought many unintended consequences that Congress is now trying to fix, including a significant increase in tax rates on benefits for children of these fallen servicemembers. This is completely unacceptable. Congress must pass legislation to fix this now; so families that have already given so much are not asked to give even more.”

Higgins is an original cosponsor of the Gold Star Family Tax Relief Act, bipartisan legislation (H.R. 2481) introduced on May 2, 2019, which corrects the problem.  The House included similar language in the SECURE Act (HR 1994) approved in the House on May 23, 2019 by a broad bipartisan vote of 417-3.  The Senate approved a standalone fix, the Gold Star Family Tax Relief Act (S. 1370) on May 21, 2019. The House and Senate will now work to reconcile the difference in the bills toward the goal of making the policy law.