The House Ways and Means Committee began considering a bill that would give tax breaks to members of the military and their families, as well as volunteer firefighters and emergency workers.
HR 3997, the "Heroes Earnings Assistance and Relief Tax Act of 2007," is designed to help families coping with the economic hardships of prolonged deployments to Iraq and Afghanistan. The bill makes permanent some of the temporary tax and Social Security measures that Congress has already passed.
"This legislation honors the hard sacrifice the women and men serving in the armed forces make for this great country of ours," said House Ways and Means Committee Chairman Charles Rangel, D-N.Y., who introduced the bill. "The HEART Act also gives deserving tribute to contributions of the legions of volunteer firefighters and emergency personnel who are our first line of defense against calamities large and small."
The bill makes permanent the ability to include combat pay as earned income for purposes of the Earned Income Tax Credit. It also makes permanent and modifies qualified mortgage bonds used to finance residences for veterans. The HEART Act would modify the Uniformed Services Employment and Reemployment Rights Act to allow the day prior to the date of death to be treated as the date the employee returned to work for the purposes of triggering the payment of benefits under a qualified plan.
It also permits an employer to make certain contributions to a qualified plan on behalf of an employee who was killed or disabled in combat. The bill would include differential wages paid by an employer to an employee who becomes active duty military in the calculation of wages for retirement plan purposes. It also clarifies the tax treatment for certain rebates of deductible state and local taxes for volunteer firefighters and excludes from income certain reimbursable expenses incurred in the line of duty by volunteer firefighters.
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