Congressman Mike Simpson is a cosponsor of H.R. 5529, the Children of Fallen Warriors AMT Relief Act.  This legislation would protect the surviving children and spouses of service members killed on active duty from facing a punitive tax on their survivor benefits.

“Our brave men and women in uniform stand in the gap between us and those who wish to do our country harm, and when they sacrifice their lives in the line of duty, it is our responsibility to ensure their families receive the treatment they deserve,” said Simpson.  “The last thing that the families of fallen servicemen and women need is to see their taxes skyrocket.”

The Alternative Minimum Tax (AMT) was created in 1969 to close loopholes used by the super-rich to avoid paying taxes.  Unfortunately, because the current tax system classifies the survivor benefits as unearned income, the survivor benefits provided to some eligible children could be taxed under the significantly higher tax rates created by the AMT.  H.R. 5529 would reclassify these annuities as earned income, ensuring that they fall under normal tax regulations instead of the punitive AMT.

“The fact that the children and spouses of service members killed in action are being taxed under a system designed to keep multi-millionaires from itemizing their taxes away makes it abundantly clear that the AMT is one of the worst provisions of the current tax code,” said Simpson.  “Fundamental reform of our tax system is critical, and H.R. 5529 is a step in the right direction.”