Honoring our military,
personally and via tax breaks

The holiday we know as Memorial Day began just after the Civil War as a way to remember those who had fallen in those divisive battles.

Originally called Decoration Day, the Memorial Day we now celebrate is a federal holiday held on the
fourth Monday in May.

And in addition to the name change, the holiday’s scope was expanded. It now is a time to recognize the sacrifices of all U.S. military members.

At 3 p.m. local time
today, there will be a National Moment of Remembrance, a time for you to
voluntarily and informally observe the holiday.

If you wish to participate in more structured events, as well as learn a bit more about Memorial Day, check out this special Web page.

Added tax breaks for the military: Before recessing for the Memorial Day holiday, Congress passed some new tax relief for military families.

The Heroes Earnings Assistance and Relief Tax Act, or HEART Act (H.R. 6081), was unanimously approved last Tuesday by the House. Two days later, the Senate OK’ed the measure by voice vote.

It now is awaiting signature by Dubya. That is not a sure thing, since the $2 billion cost of the bill’s tax breaks would be paid for by preventing other people and companies from avoiding taxes. Some of those companies, including defense contractors, have set up overseas offices to avoid paying U.S. Social Security and
Medicare taxes.

If the bill does make it into law, some of the tax provisions of the HEART Act include:

• Making permanent the ability to include combat pay as earned
  income for purposes of claiming the Earned Income Tax Credit.
• Allowing active-duty reservists to make penalty-free withdrawals from their retirement
  plans.
• Clarifying that those on active duty who file a
  joint tax return will be eligible for the economic stimulus rebate
  payment even if the spouse does not have a Social Security number.
• Permitting military survivors to place death benefits into tax-deferred retirement or savings plans.
• Providing a tax credit for small business employers who make
  up the difference of wages lost to employees called to active duty.

The measure, supported by major service organizations, also makes thousands of veterans eligible for low-interest home loans.

"This bill is called the HEART Act, but I would prefer to call it
the ‘Thank You Bill’ — thank you to the tens of thousands of American
men and women who have responded to America’s call to fight this war
and place themselves in harm’s way to serve this nation," House Ways
and Means Committee Chairman Charles Rangel (D-N.Y.), said when the
House passed it.

You can read more about the HEART Act in this fact sheet from House Speaker Nancy Pelosi (D-Calif.), this Social Security Administration legislative bulletin, and in this Army Times article.