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Daily Caller

Amber Athey | White House Correspondent/DC

Gold Star families will have to wait a bit longer for tax relief after House Democrats attached the issue to a larger retirement package.

The Senate passed S.1370, the Gold Star Family Tax Relief Act, on May 21 through unanimous consent. The bill, which was sponsored by Republican Louisiana Sen. Bill Cassidy, eliminates a provision in the Tax Cuts and Jobs Act (TCJA) that applies a higher tax rate on survivor benefits given to children of deceased military members.

Some military widows opt to sign their survivor benefits over to their children in order to avoid what they call the “widow’s tax,” a government-mandated offset that prevents them from receiving full benefits from both Department of Defense (DOD) and Veterans Affairs (VA) programs. (RELATED: Gold Star Wives Lobby Congress For Full Survivor Benefits)

However, the TCJA’s so-called “Kiddie Tax” meant the benefits to the child could end up being taxed at a rate as high as 37%. The Gold Star Family Tax Relief Act ensures that the survivor benefits are instead taxed as normal earned income.

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