Check out 
Loading ...
Congress Passes HEART Act Giving Tax Breaks to Military Personnel
The U.S. Congress has overwhelming passed the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008 which provides tax breaks to military service personnel and their families. Some of the provisions include a tax credit for small businesses that pay a salary differential to employees called up for active duty and an exemption for reservists from the “use it or lose it” rule for unused health care flexible spending account balances.
The law would also would modify the Uniformed Services Employment and Re-employment Rights Act (USERRA) to allow the day prior to the date of a service person’s death to be treated as the date the employee returned to work for purposes of triggering payment of benefits under a qualified retirement plan. It would permit an employer to make certain contributions to a qualified pension plan on behalf of an employee who is killed or becomes disabled in combat. The law would also make permanent the special rules that permit penalty-free withdrawals from retirement plans.
For employers who voluntarily agree to continue paying the level of compensation that a service member would otherwise have received from the employer during the service member’s period of active duty, the “differential pay” would not be treated as wages for purposes of the federal income tax withholding rules that apply to an employer’s payment of wages. The HEART Act would treat differential wages paid by an employer to an employee who becomes active duty military as wages for withholding and retirement plan purposes.
President Bush signed the HEART Act into law on June 17, 2008.
Permalink