Congress approves tax breaks for military and civilian first responders

http://www.nytimes.com/aponline/us/AP-Military-Taxes.html?_r=1&oref=slogin

House OKs Tax Benefits for Military

By THE ASSOCIATED PRESS
Published: December 18, 2007
Filed at 8:20 p.m. ET
WASHINGTON (AP) -- The House voted Tuesday to give the nation's military and public servants such as volunteer firefighters more tax benefits in response to their service.
''This bill honors the great sacrifice of the women and men who serve our country by keeping all Americans safe in times of international and national crisis,'' said Rep. Charles Rangel, D-N.Y., and chairman of the House Ways and Means Committee.
The bill, which passed 411-0, now goes to the Senate.
The legislation makes permanent current law to include combat pay as earned income for purposes of the Earned Income Tax Credit, which refunds payroll and income taxes to low-income people.
It also makes permanent Internal Revenue Service provisions to permit active-duty reservists to make penalty-free withdrawals from retirement plans and to allow employers to make contributions to retirement plans on behalf of an employee killed or disabled in combat.
Thousands of veterans also would be eligible for low-interest loans to become homeowners.
The breaks also extend to other public servants such as volunteer firefighters. The bill states that reimbursements for expenses incurred by volunteer firefighters in the line of duty are not taxable.
The House also passed a bill to guarantee military veterans who are discharged due to combat-related injuries their full enlistment or re-enlistment bonuses.
Supporters of the bill, which passed 405-0, expressed outrage over reports of veterans being told by the military that they had to repay their bonuses because they had not served their full military obligation.
The Pentagon has said that it has long been its policy to fully pay enlistment bonuses to military personnel forced to leave early for reasons beyond their control, such as a combat injury. It has blamed notices of repayment to wounded veterans on administrative errors that would be corrected.
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The military tax bill is H.R. 3997.
The enlistment bonus bill is H.R. 3793.
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