Heroes Earnings Assistance and Relief Tax Act of 2008

Bill: 110-hr-6081
Sponsor: Rep. Rangel, Charles B. [D-NY-15]
Introduced: 2008-05-16 in the House
Policy area: Taxation
Subjects: Annuities
Armed Forces and National Security
Armed forces reserves
Blind
Bonds
Capital gains tax
Commerce
Disabled
Earned income tax credit
Earnings
Education
Education savings accounts
Emergency Management
Employee health benefits
Expatriation
Families
Finance and Financial Sector
Fire fighters
Flexible benefit plans
Foreign Trade and International Finance
Foreign corporations
Government Operations and Politics
Government contractors
Government service contracts
Health
Higher education
Home ownership
Housing and Community Development
Housing finance
Identification devices
Immigration
Income tax
Individual retirement accounts
Intelligence community staff
Labor and Employment
Life insurance
Mental health services
Military dependents
Military pay
Military personnel
Mortgages
National service
Peace Corps
Social Welfare
Social security taxes
Subsidiary corporations
Supplemental security income program
Survivors' benefits
Tax credits
Tax deferral
Tax evasion
Tax exclusion
Tax penalties
Tax rebates
Tax refunds
Tax returns
Tax-deferred compensation plans
Unemployment insurance
Veterans' benefits
Volunteer workers
Wages
War casualties
Welfare eligibility
Withholding tax

Summary:
action_date: 2008-05-16
text: 
Heroes Earnings Assistance and Relief Tax Act of 2008 - Amends Internal Revenue Code provisions relating to military personnel to: (1) deem spouses of members of the Armed Forces with valid identification numbers to have a valid identification number for purposes of claiming a 2008 recovery rebate; (2) require tax-qualified pension plans to entitle survivors of plan participants who die while on active military duty to certain additional benefits and benefit accruals; (3) treat differential wage payments to employees who serve on military active duty as wages for withholding and retirement plan purposes; (4) extend the limitation period for filing refund claims arising from Department of Veterans Affairs (VA) disability determinations; (5) allow tax-free rollovers of military death gratuities and life insurance benefits into survivor Roth individual retirement accounts (Roth IRAs) and education savings plans; (6) allow Peace Corps volunteers a five-year suspension of the use and ownership requirements applicable to the tax exclusion of gain from the sale of a personnel residence; (7) allow employers a tax credit for differential wage payments made to their employees who are active duty members of the uniformed services; (8) treat state payments to members of the uniformed services as qualified military benefits for purposes of the tax exclusion of such benefits; (9) permit members of the military reserve called to active duty to withdraw amounts held in a flexible spending account without penalty; and (10) affirm that excludable tax rebates and other benefits paid to volunteer firefighters are not subject to employment or unemployment taxes.

Makes permanent: (1) the election to include combat pay as earned income for purposes of the earned income tax credit; (2) the authority to use qualified mortgage bonds to finance residences for veterans; (3) penalty-free retirement account withdrawals for individuals called or ordered to active military duty; (4) the authority of the Social Security Administration (SSA) to disclose tax return information to the VA for benefit determinations; and (5) exclusion of gain provisions relating to the sale of a principal residence by certain employees of the intelligence community.

Amends title XVI (Supplemental Security Income for the Aged, Blind, and Disabled) of the Social Security Act to treat cash remuneration paid to members of the uniformed services as earned income. Excludes certain state annuity payments to blind, disabled, or aged veterans and cash or in-kind benefits paid to AmeriCorps volunteers from supplemental security income determinations. 

Revises tax rules relating to U.S. citizens and permanent residents (expatriates) who relinquish citizenship or residency to avoid U.S. taxation. 

Treats certain foreign subsidiaries of U.S. companies performing services under a contract with the U.S. government as U.S. employers for purposes of Social Security and Medicare employment taxes.

Increases the minimum penalty for failure to file an individual income tax return. 

Extends through 2008 mental health parity requirements for group health plans.

action_date: 2008-05-20
text: 
Heroes Earning Assistance and Relief Tax Act of 2008 -Amends the Internal Revenue Code to provide tax benefits and incentives for military personnel.

Title I: Benefits for Military
 - (Sec 101) Exempts married taxpayers who file a joint tax return from the identification requirement for the 2008 recovery tax rebate if at least one of the filers is a current member of the Armed Forces.

(Sec. 102) Makes permanent the election to treat combat zone compensation as earned income for purposes of the earned income tax credit. 

(Sec. 103) Makes permanent the exemption from the first-time homebuyer rule for veterans using mortgage revenue bonds to purchase a residence. 

Increases the issuance limits on mortgage revenue bonds for veterans in Alaska, Oregon, and Wisconsin to $100 million after 2009. 

Revises the definition of &quot;qualified veteran&quot; for mortgage bond financing eligibility purposes to eliminate the pre-1977 active duty requirement and to reduce the eligibility period to 25 years.

(Sec. 104) Requires tax-qualified pension plans to entitle survivors of plan participants who die while on active military duty to additional benefits and benefit accruals provided under such plans for participants who resume and then terminate employment due to death.

(Sec. 105) Treats differential wage payments to an employee as a payment of wages for income tax purposes. Defines &quot;differential wage payment&quot; as any employer payment to an individual serving on active duty in the uniformed services for more than 30 days that represents wages such individual would have received if such individual were performing services for the employer.

Treats an individual receiving differential wage payments as an employee and treats such payments as compensation for retirement plan purposes.

(Sec. 106) Allows members of the uniformed services whose retired pay in any taxable year is reduced due to an award of disability compensation by the Department of Veterans Affairs (VA) an extension of the three-year limitation period for filing tax refund claims until one year after the date of a disability determination. Limits the period for which such refund claims may be filed to taxable years beginning more than five years before the date of a disability determination.

(Sec. 107) Makes permanent the penalty exemption for premature withdrawals from retirement plans for individuals called or ordered to active military duty on or after December 31, 2007. 

(Sec. 108) Makes permanent the authority of the Social Security Administration (SSA) to disclose tax return information to the VA for purposes of making veterans benefit determinations. 

(Sec. 109) Allows a tax-free rollover of any military death gratuity and any group life insurance payment to a survivor's Roth individual retirement account (Roth IRA) or to an education savings account.

(Sec. 110) Allows an active Peace Corps volunteer an election to suspend the running of the five-year period for determining ownership and use of a principal residence for purposes of the tax exclusion of the gain from the sale of such a residence.

(Sec. 111) Allows certain small business employers a tax credit for up to 20% of the differential wage payments made for the benefit of active duty members of the Armed Forces.

(Sec. 112) Allows an exclusion from gross income for bonus payments made by a state or political subdivision to current or former members of the uniformed services (or dependents) for service in a combat zone.

(Sec. 113) Makes permanent the exclusion from the gross income of certain employees of the intelligence community of gain from the sale of their principal residences without regard to otherwise applicable five-year residential use and holding requirements.

(Sec. 114) Allows a tax-free distribution of unused benefits in a health flexible spending arrangement to any member of an Armed Forces reserve component who is ordered or called to active duty.

(Sec. 115) Exempts certain state and local payments to and benefits for volunteer firefighters and emergency medical responders from federal employment and unemployment taxes.

Title II: Improvements in Supplemental Security Income
 - (Sec. 201) Amends title XVI (Supplemental Security Income for the Aged, Blind, and Disabled) of the Social Security Act to treat cash remuneration paid to a member of the uniformed services as earned income and certain housing payments to such members as in-kind support and maintenance for supplemental security income (SSI) program purposes.

(Sec. 202) Excludes state annuity payments to blind, disabled, or aged veterans for purposes of SSI benefit determinations.

(Sec. 203) Excludes any cash or in-kind benefit paid to an AmeriCorps participant from SSI income eligibility and benefit determinations.

Title III: Revenue Provisions
 - (Sec. 301) Sets forth additional rules for the tax treatment of high-income individuals who relinquish U.S. citizenship or residency to avoid U.S. taxation (expatriates). Treats all property of expatriates as sold for fair market value on the day before the expatriation date and includes gain (over $600,000) or loss from such sale in their gross income. Allows expatriates to elect to defer payment of any tax resulting from expatriation if adequate security for payment of such tax is given.

Requires 30% withholding of tax for certain items of deferred compensation payable to expatriates.

Imposes a separate tax on gifts and bequests from expatriates exceeding $10,000, payable by the recipient of such gift or bequest.

(Sec. 302) Treats certain foreign subsidiaries of U.S. companies performing services under a contract with the U.S. government as U.S. employers for purposes of Social Security and Medicare employment taxes.

(Sec. 303) Increases the minimum penalty for failure to file an individual income tax return to $135 or 100% of the amount required to be shown on such return.

Title IV: Parity in the Application of Certain Limits to Mental Health Benefits 
- Amends the Internal Revenue Code, the Employee Retirement Income Security Act of 1974 (ERISA), and the Public Health Service Act to extend through 2008 parity requirements applicable to mental health benefits offered by group health plans.

action_date: 2008-05-22
text: 

(This measure has not been amended since it was passed by the House on May 20, 2008. The summary of that version is repeated here.)

Heroes Earning Assistance and Relief Tax Act of 2008 -Amends the Internal Revenue Code to provide tax benefits and incentives for military personnel.

Title I: Benefits for Military
 - (Sec 101) Exempts married taxpayers who file a joint tax return from the identification requirement for the 2008 recovery tax rebate if at least one of the filers is a current member of the Armed Forces.

(Sec. 102) Makes permanent the election to treat combat zone compensation as earned income for purposes of the earned income tax credit. 

(Sec. 103) Makes permanent the exemption from the first-time homebuyer rule for veterans using mortgage revenue bonds to purchase a residence. 

Increases the issuance limits on mortgage revenue bonds for veterans in Alaska, Oregon, and Wisconsin to $100 million after 2009. 

Revises the definition of &quot;qualified veteran&quot; for mortgage bond financing eligibility purposes to eliminate the pre-1977 active duty requirement and to reduce the eligibility period to 25 years.

(Sec. 104) Requires tax-qualified pension plans to entitle survivors of plan participants who die while on active military duty to additional benefits and benefit accruals provided under such plans for participants who resume and then terminate employment due to death.

(Sec. 105) Treats differential wage payments to an employee as a payment of wages for income tax purposes. Defines &quot;differential wage payment&quot; as any employer payment to an individual serving on active duty in the uniformed services for more than 30 days that represents wages such individual would have received if such individual were performing services for the employer.

Treats an individual receiving differential wage payments as an employee and treats such payments as compensation for retirement plan purposes.

(Sec. 106) Allows members of the uniformed services whose retired pay in any taxable year is reduced due to an award of disability compensation by the Department of Veterans Affairs (VA) an extension of the three-year limitation period for filing tax refund claims until one year after the date of a disability determination. Limits the period for which such refund claims may be filed to taxable years beginning more than five years before the date of a disability determination.

(Sec. 107) Makes permanent the penalty exemption for premature withdrawals from retirement plans for individuals called or ordered to active military duty on or after December 31, 2007. 

(Sec. 108) Makes permanent the authority of the Social Security Administration (SSA) to disclose tax return information to the VA for purposes of making veterans benefit determinations. 

(Sec. 109) Allows a tax-free rollover of any military death gratuity and any group life insurance payment to a survivor's Roth individual retirement account (Roth IRA) or to an education savings account.

(Sec. 110) Allows an active Peace Corps volunteer an election to suspend the running of the five-year period for determining ownership and use of a principal residence for purposes of the tax exclusion of the gain from the sale of such a residence.

(Sec. 111) Allows certain small business employers a tax credit for up to 20% of the differential wage payments made for the benefit of active duty members of the Armed Forces.

(Sec. 112) Allows an exclusion from gross income for bonus payments made by a state or political subdivision to current or former members of the uniformed services (or dependents) for service in a combat zone.

(Sec. 113) Makes permanent the exclusion from the gross income of certain employees of the intelligence community of gain from the sale of their principal residences without regard to otherwise applicable five-year residential use and holding requirements.

(Sec. 114) Allows a tax-free distribution of unused benefits in a health flexible spending arrangement to any member of an Armed Forces reserve component who is ordered or called to active duty.

(Sec. 115) Exempts certain state and local payments to and benefits for volunteer firefighters and emergency medical responders from federal employment and unemployment taxes.

Title II: Improvements in Supplemental Security Income
 - (Sec. 201) Amends title XVI (Supplemental Security Income for the Aged, Blind, and Disabled) of the Social Security Act to treat cash remuneration paid to a member of the uniformed services as earned income and certain housing payments to such members as in-kind support and maintenance for supplemental security income (SSI) program purposes.

(Sec. 202) Excludes state annuity payments to blind, disabled, or aged veterans for purposes of SSI benefit determinations.

(Sec. 203) Excludes any cash or in-kind benefit paid to an AmeriCorps participant from SSI income eligibility and benefit determinations.

Title III: Revenue Provisions
 - (Sec. 301) Sets forth additional rules for the tax treatment of high-income individuals who relinquish U.S. citizenship or residency to avoid U.S. taxation (expatriates). Treats all property of expatriates as sold for fair market value on the day before the expatriation date and includes gain (over $600,000) or loss from such sale in their gross income. Allows expatriates to elect to defer payment of any tax resulting from expatriation if adequate security for payment of such tax is given.

Requires 30% withholding of tax for certain items of deferred compensation payable to expatriates.

Imposes a separate tax on gifts and bequests from expatriates exceeding $10,000, payable by the recipient of such gift or bequest.

(Sec. 302) Treats certain foreign subsidiaries of U.S. companies performing services under a contract with the U.S. government as U.S. employers for purposes of Social Security and Medicare employment taxes.

(Sec. 303) Increases the minimum penalty for failure to file an individual income tax return to $135 or 100% of the amount required to be shown on such return.

Title IV: Parity in the Application of Certain Limits to Mental Health Benefits 
- Amends the Internal Revenue Code, the Employee Retirement Income Security Act of 1974 (ERISA), and the Public Health Service Act to extend through 2008 parity requirements applicable to mental health benefits offered by group health plans.

action_date: 2008-06-17
text: 

(This measure has not been amended since it was passed by the House on May 20, 2008. The summary of that version is repeated here.)

Heroes Earning Assistance and Relief Tax Act of 2008 -Amends the Internal Revenue Code to provide tax benefits and incentives for military personnel.

Title I: Benefits for Military
 - (Sec 101) Exempts married taxpayers who file a joint tax return from the identification requirement for the 2008 recovery tax rebate if at least one of the filers is a current member of the Armed Forces.

(Sec. 102) Makes permanent the election to treat combat zone compensation as earned income for purposes of the earned income tax credit. 

(Sec. 103) Makes permanent the exemption from the first-time homebuyer rule for veterans using mortgage revenue bonds to purchase a residence. 

Increases the issuance limits on mortgage revenue bonds for veterans in Alaska, Oregon, and Wisconsin to $100 million after 2009. 

Revises the definition of &quot;qualified veteran&quot; for mortgage bond financing eligibility purposes to eliminate the pre-1977 active duty requirement and to reduce the eligibility period to 25 years.

(Sec. 104) Requires tax-qualified pension plans to entitle survivors of plan participants who die while on active military duty to additional benefits and benefit accruals provided under such plans for participants who resume and then terminate employment due to death.

(Sec. 105) Treats differential wage payments to an employee as a payment of wages for income tax purposes. Defines &quot;differential wage payment&quot; as any employer payment to an individual serving on active duty in the uniformed services for more than 30 days that represents wages such individual would have received if such individual were performing services for the employer.

Treats an individual receiving differential wage payments as an employee and treats such payments as compensation for retirement plan purposes.

(Sec. 106) Allows members of the uniformed services whose retired pay in any taxable year is reduced due to an award of disability compensation by the Department of Veterans Affairs (VA) an extension of the three-year limitation period for filing tax refund claims until one year after the date of a disability determination. Limits the period for which such refund claims may be filed to taxable years beginning more than five years before the date of a disability determination.

(Sec. 107) Makes permanent the penalty exemption for premature withdrawals from retirement plans for individuals called or ordered to active military duty on or after December 31, 2007. 

(Sec. 108) Makes permanent the authority of the Social Security Administration (SSA) to disclose tax return information to the VA for purposes of making veterans benefit determinations. 

(Sec. 109) Allows a tax-free rollover of any military death gratuity and any group life insurance payment to a survivor's Roth individual retirement account (Roth IRA) or to an education savings account.

(Sec. 110) Allows an active Peace Corps volunteer an election to suspend the running of the five-year period for determining ownership and use of a principal residence for purposes of the tax exclusion of the gain from the sale of such a residence.

(Sec. 111) Allows certain small business employers a tax credit for up to 20% of the differential wage payments made for the benefit of active duty members of the Armed Forces.

(Sec. 112) Allows an exclusion from gross income for bonus payments made by a state or political subdivision to current or former members of the uniformed services (or dependents) for service in a combat zone.

(Sec. 113) Makes permanent the exclusion from the gross income of certain employees of the intelligence community of gain from the sale of their principal residences without regard to otherwise applicable five-year residential use and holding requirements.

(Sec. 114) Allows a tax-free distribution of unused benefits in a health flexible spending arrangement to any member of an Armed Forces reserve component who is ordered or called to active duty.

(Sec. 115) Exempts certain state and local payments to and benefits for volunteer firefighters and emergency medical responders from federal employment and unemployment taxes.

Title II: Improvements in Supplemental Security Income
 - (Sec. 201) Amends title XVI (Supplemental Security Income for the Aged, Blind, and Disabled) of the Social Security Act to treat cash remuneration paid to a member of the uniformed services as earned income and certain housing payments to such members as in-kind support and maintenance for supplemental security income (SSI) program purposes.

(Sec. 202) Excludes state annuity payments to blind, disabled, or aged veterans for purposes of SSI benefit determinations.

(Sec. 203) Excludes any cash or in-kind benefit paid to an AmeriCorps participant from SSI income eligibility and benefit determinations.

Title III: Revenue Provisions
 - (Sec. 301) Sets forth additional rules for the tax treatment of high-income individuals who relinquish U.S. citizenship or residency to avoid U.S. taxation (expatriates). Treats all property of expatriates as sold for fair market value on the day before the expatriation date and includes gain (over $600,000) or loss from such sale in their gross income. Allows expatriates to elect to defer payment of any tax resulting from expatriation if adequate security for payment of such tax is given.

Requires 30% withholding of tax for certain items of deferred compensation payable to expatriates.

Imposes a separate tax on gifts and bequests from expatriates exceeding $10,000, payable by the recipient of such gift or bequest.

(Sec. 302) Treats certain foreign subsidiaries of U.S. companies performing services under a contract with the U.S. government as U.S. employers for purposes of Social Security and Medicare employment taxes.

(Sec. 303) Increases the minimum penalty for failure to file an individual income tax return to $135 or 100% of the amount required to be shown on such return.

Title IV: Parity in the Application of Certain Limits to Mental Health Benefits 
- Amends the Internal Revenue Code, the Employee Retirement Income Security Act of 1974 (ERISA), and the Public Health Service Act to extend through 2008 parity requirements applicable to mental health benefits offered by group health plans.


Legislative actions:
action_date: 2008-06-17
text: Became Public Law No: 110-245.
action_date: 2008-06-17
text: Became Public Law No: 110-245.
action_date: 2008-06-17
text: Signed by President.
action_date: 2008-06-17
text: Signed by President.
action_date: 2008-06-06
text: Presented to President.
action_date: 2008-06-06
text: Presented to President.
action_date: 2008-05-22
text: Cleared for White House.
action_date: 2008-05-22
text: Message on Senate action sent to the House.
action_date: 2008-05-22
text: Passed Senate without amendment by Unanimous Consent. (consideration: CR S4772-4774)
action_date: 2008-05-22
text: Passed/agreed to in Senate: Passed Senate without amendment by Unanimous Consent.(consideration: CR S4772-4774)
action_date: 2008-05-21
text: Received in the Senate, read twice.
action_date: 2008-05-20
text: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 403 - 0 (Roll no. 331). (text: CR H4160-4167)
action_date: 2008-05-20
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2008-05-20
text: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 403 - 0 (Roll no. 331).(text: CR H4160-4167)
action_date: 2008-05-20
text: Considered as unfinished business. (consideration: CR H4187-4188)
action_date: 2008-05-20
text: At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
action_date: 2008-05-20
text: DEBATE - The House continued with debate on H.R. 6081.
action_date: 2008-05-20
text: DEBATE - The House proceeded with forty minutes of debate on H.R. 6081.
action_date: 2008-05-20
text: Considered under suspension of the rules. (consideration: CR H4160-4171)
action_date: 2008-05-20
text: Mr. Rangel moved to suspend the rules and pass the bill, as amended.
action_date: 2008-05-16
text: Referred to the House Committee on Ways and Means.
action_date: 2008-05-16
text: Introduced in House
action_date: 2008-05-16
text: Introduced in House

Enacted as: number: 110-245