What does the HEART Act include?
A military tax bill containing a combination of new tax benefits and the extension of existing benefits was signed into law Tuesday by President Bush.
The Heroes Earnings Assistance and Relief Tax Act of 2008, or HEART Act, includes a provision allowing military families to receive the $600-per-person economic stimulus rebate even if a spouse does not have a Social Security number.
Also, through the law:
– Survivors of people who die on active-duty are now allowed to put all or part of death gratuity payments into a tax-deferred savings or retirement plan, even if this puts them over the annual limit for contributions.
– Mobilized National Guard and reserve members may make penalty-free withdrawals from their personal retirement plans, which especially helps those with financial troubles caused by military service.
– Guard and reserve members who contribute to an employer-provided flexible spending account can get refunds of contributions at the end of a calendar year, rather than lose the money, if they have been mobilized, since mobilizations could interfere with their ability to spend money as expected.
– Small businesses employing Guard and reserve members may receive a $4,000 tax credit to make up salary differences for employees who are mobilized for military duty.
– When calculating aid for military families, the Social Security Administration will not use combat-related pays to disqualify a family for disability or health benefits.
– California, Texas and other states with their own home loan programs would be able to provide loans to newly discharged service members, something that was not previously allowed because of bond-related issues. Rep. Susan Davis, D-Calif., chairwoman of the House Armed Services personnel panel, who pushed for the change, said this is an important update in law.
“Those returning from Iraq and Afghanistan will now greater opportunities to purchase homes, especially in California’s high-cost real estate market,” Davis said.
More information here.