Senator Doug Jones, Colleagues Introduce Bipartisan Bill to Fix Unintended Tax Hike on Gold Star Families

Press Release

U.S. Senators Doug Jones (D-Ala.), Bill Cassidy (R-La.), Amy Klobuchar (D-Minn.), Pat Toomey (R-Pa.), Mark Warner (D-Va.), Chuck Grassley (R-Iowa), Ron Wyden (D-Ore.), and Angus King (I-Maine) and 21 other bipartisan senators today introduced legislation providing tax relief for survivor benefits received by children who have lost a parent as a result of their service in the military. A provision in the 2017 Tax Cuts and Jobs Act significantly raised the taxes on these survivor benefits to rates as high as 37 percent. The bipartisan Gold Star Family Tax Relief Act would reverse this provision in the tax bill.

Gold Star families who received a surprise tax hike on their children's benefits in their 2018 tax bills are facing this "Kiddie Tax" because they are also subject to what's called the "Widow's Tax." Senator Jones recently introduced legislation to repeal the "Widow's Tax," a law that prevents as many as 65,000 surviving military spouses nationwide from receiving their full survivor benefits from both the Department of Defense (DoD) and Veterans Affairs (VA). As a direct result of the Widow's Tax, Gold Star parents often put their DoD benefits in their children's names in order to collect the full survivor benefits they are due and have also paid for in the form of annuities for a voluntary DoD life insurance program.

"Gold Star families have given more to our country than most of us could ever imagine. While we can never repay their immense sacrifices, we do make a solemn commitment to care for them. Unfortunately, thousands of these widows and widowers are currently denied the full benefits they're due, which forces many to resort to putting some of these benefits in their children's names. To significantly raise taxes on those children's benefits is unconscionable, and I am proud to join with my colleague Senator Cassidy to propose legislation to correct this egregious mistake. It is a first step toward honoring our commitment and making these families whole financially," said Senator Jones, a member of the Senate Armed Services Committee.

U.S. Senators Tammy Baldwin (D-Wis.), Michael Bennet (D-Colo.), Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Richard Burr (R-N.C.), Bob Casey (D-Pa.), Catherine Cortez Masto (D-Nev.), Mike Crapo (R-Idaho), John Cornyn (R-Texas), Tom Cotton (R-Ark.), Ron Johnson (R-Wis.), Steve Daines (R-Mont.), Maggie Hassan (D-N.H.), Johnny Isakson (R-Ga.), Bob Menendez (D-N.J.), Patty Murray (D-Wash.), Gary Peters (D-Mich.), Pat Roberts (R-Kan.), Tim Scott (R-S.C.), Kyrsten Sinema (D-Ariz.), and Jon Tester (D-Mont.) are also cosponsors of the legislation. Companion legislation has been sponsored in the House of Representatives by Rep. Terri Sewell (AL-07).