WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) today joined a group of his Senate colleagues to introduce the Gold Star Family Tax Relief Act, bipartisan legislation that would provide financial relief for the families of U.S. servicemembers who have died while on active duty. The bill would reverse a provision in the 2017 Tax Cuts and Jobs Act to ensure that Gold Star children who receive Survivor Benefit Plan income are taxed at their individual income rate, and not at far higher trust rates. For a Gold Star child who receives income of $10,000 in Survivor Benefit Plan payments per year, the Gold Star Family Tax Relief Act will result in a tax rate cut of over 68 percent.

“Gold Star families have sacrificed profoundly for our country. As they grieve for their loved one, they should be met with our love and support, not with additional financial hardships,” Senator King said. “In President Lincoln’s Second Inaugural Address, he summed up our collective responsibility to care for our nation’s veterans and their families saying we must, ‘care for him who shall have borne the battle and for his widow and his orphan.’ We must work every day to uphold this collective responsibility, and fight for those who have sacrificed so much in defense of our freedom.”

Some children of Gold Star families participate in the Survivor Benefit Plan, an annuity administered by the Department of Defense that pays survivors an inflation-adjusted monthly income. This income is subject to the kiddie tax, which aims to prevent high-income parents from shifting income to their children to take advantage of their child’s lower tax rate.

Since the passage of the tax bill in 2017, Survivor Benefit Plan income subject to the kiddie tax has been taxed at trust rates, rather than at the parent’s marginal rate. Because the 2017 tax bill raised kiddie tax rates to trust levels, many Gold Star families saw their survivor benefits taxed at rates much higher than under previous law. The Gold Star Family Tax Relief Act would make Survivor Benefit Plan payments to a Gold Star child part of that child’s earned income.  Accordingly, Survivor Benefit Plan payments to a Gold Star child would be taxed at the child’s individual income rate.  The Gold Star Family Tax Relief Act would be retroactive to January 1, 2018, providing relief for Gold Star families that have faced hardship due to the current tax treatment of Survivor Benefit Plan payments.

Joining Senator King in support of the legislation are Senators Bill Cassidy (R-La.), Doug Jones (D-Ala.), Pat Toomey (R-Pa.), Mark Warner (D-Va.), Chuck Grassley (R-Iowa), Ron Wyden (D-Ore.), Amy Klobuchar (D-Minn.), 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-Ari.), and Jon Tester (D-Mont.).