A provision offered by Senators John Kerry, Mark Pryor and Barack Obama to protect our troops from losing an important tax credit passed the Senate today. This provision, added to the Gulf Opportunity Zone Act of 2005, will continue giving men and women serving in the military the option of applying their pay earned in a combat zone toward the Earned Income Tax Credit (EITC). The original tax legislation was authored and passed under the leadership of Senator Mark Pryor in 2004.
The measure is endorsed by the National Military Family Association.
The EITC is a refundable tax credit that supplements the earnings of low- and moderate-income workers and has proven to be an extremely effective tool to fight poverty. As it was originally written, their pay earned in a combat zone was not counted toward the credit, which prevented service members from receiving thousands of extra dollars under the program that they would otherwise qualify for. The current provision allowing pay earned in a combat zone to count toward the EITC expires at the end of 2005, and the amendment would provide an extension of this fix through the end of 2006.
“Our troops fight bravely for our country everyday. They shouldn’t be punished by a glitch in the tax code because they are deployed in a combat zone. Combat pay is supposed to help families, not hurt them,” Kerry said. “We’ve seen how effective the earned income tax credit has been in helping American families make ends meet, and I am proud that the Senate has made this a reality for our military families. Now we have to get President Bush to sign it into law.”
“Our soldiers serving in combat risk life and limb every hour of every day; they do not deserve to be penalized when it comes to tax relief,” Pryor said. “Allowing this tax benefit to expire would have meant shortchanging men and women serving heroically in combat who are not making much money, have families to provide for and have little or no savings or spousal income. Extending this legislation sends a clear message to our brave service members that while they are away fighting for us we will be here in the Senate fighting for them and their families.”
“This legislation is just common sense,” said Obama. “When our troops put their lives on the line to protect ours, they should be allowed to count their combat pay in qualifying for larger tax credits to help support their families back home. If the Senate had not acted today, many of our troops would have faced a tax increase next year.”
Joyce Wessel Raezer, Director of Government Relations for National Military Family Association said, “NMFA believes this provision must be made permanent to ensure young military families-who often find themselves in a precarious financial situation-retain the tax benefits they to which they would normally be entitled. They should not lose their eligibility for the important relief provided by the Earned Income Tax Credit simply because their servicemember has deployed to a combat zone.”