CRAPO: TAX POLICIES SHOULD NOT BURDEN TROOPS
Legislation passed by Congress provides tax benefits to troops, veterans
Washington, DC - Military families and veterans in Idaho will benefit under legislation cleared by the U.S. Senate, according to Idaho Senator Mike Crapo. The Defenders of Freedom Tax Relief Act of 2007 (H.R. 3997) provides specific tax relief for those who are currently serving in the military and their families as well as those who are veterans or serving in the reserves. The amended bill will be sent back to the House of Representatives for final approval before being sent to the President for his signature. Crapo is a co-sponsor of the Senate version of the measure.
Crapo, who serves on the Senate Finance Committee which oversees tax policy, said, "This bill is one step in recognizing the sometimes-unusual financial circumstances that our servicemen and women find themselves in. It provides tax relief and financial assistance in a number of ways: home purchase and sale, income, disability compensation and death gratuities, penalty-free withdrawal and other benefits. Our country must make certain that its tax policies do not unduly burden those serving far away from home, defending our freedoms. I am pleased to support this legislation and look forward to its swift enactment."
The measure provides an estimated $553 million in tax relief over the next ten years. Among those provisions:
• Permanent extension of the qualified mortgage bond first-time homebuyer exemption for veterans.
• Permanent extension of election to include combat pay as earned income for the Earned Income Tax Credit (EITC).
• Extension of the statute of limitation when military retired pay is reduced as a result of disability compensation.
• Tax credit for small employers of Employee Reservists and National Guardsmen called for active duty.
• Penalty-free withdrawals from retirement plans for reservists called to active duty.
• Roll-over of military death gratuities to tax-favored account.
• Exclusion of gain from sale of principal residence for intelligence service employees.
• Treatment of state payments to service members as nontaxable gifts.