The Senate on Tuesday unanimously voted to pass a bill that reverses a tax increase in the 2017 GOP tax law involving military survivor benefits that go to children, The Hill reports.
The tax law included a so-called “kiddie tax” on unearned income by children, intended to keep wealthy parents from avoiding tax on their wealth by passing it onto their children. Prior to the law, children’s unearned income was taxed at the same rate as their parents’, but now it’s taxed at the same rate that trusts are taxed.
This also had the effect of raising taxes on benefits that go to the children of deceased members of the military. The bill passed on Tuesday changes this, so that military survivor benefits are treated as earned income when it comes to the “kiddie tax.”
“This bipartisan legislation is one step closer to helping those who lost a father or mother serving in the military to protect our freedom,” said Sen. Bill Cassidy, R-La., who sponsored the bill.
Virginia Democratic Sens. Tim Kaine and Mark Warner added that they’re “glad” the matter has been dealt with by the Senate, and that hopefully the House "will take action swiftly to ensure that Gold Star families aren’t hit with a tax hike.”
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