Daily Tax Report ®

Tax Law Hurting Military Families, Klobuchar Says

April 30, 2019, 4:51 PM

A change in the 2017 tax law is bringing a significant tax hit on the survivor benefits for children of deceased military service members, Sen. Amy Klobuchar (D-Minn.) said.

Families previously paid an average of 12 percent to 15 percent in taxes on the survivor benefit. Now, they are paying a tax rate of up to 37 percent, because the tax law said the benefits should be treated as a trust or estate, according to the letter released April 30 under the Freedom of Information Act.

The letter is addressed to Treasury Secretary Steven Mnuchin. Klobuchar called on the Treasury Department, which has said it is evaluating the issue, to “work as quickly as possible to identify solutions and prevent these changes from hurting our military families.”

  • Republicans on the House Ways and Means Committee called it an unintended consequence of the law, Klobuchar said. A spokesman didn’t immediately return a request for comment.
  • Klobuchar is a 2020 presidential candidate.

To contact the reporter on this story: Colleen Murphy in Washington at cmurphy@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Karen Saunders at ksaunders@bloombergtax.com

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