SuzanneWynn
06-09-2008, 03:33 PM
Both the House and the Senate passed the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART), H.R. 6081. I've held off about posting about this because I expected the President to sign it into law by now.
This bill impacts qualified military service definitions for qualified plans for both compensation and distributions. Section 104 of the Act adds Section 401(a)(37) to the Code on "Death Benefits Under USERRA-Qualified Active Military Service". It states:
"(37) Death Benefits Under USERRA-Qualified Active Military Service. - A trust shall not constitute a qualified trust unless the plan provides that, in the case of a participant who dies while performing qualified military service (as defined in section 414(u)), the survivors of the participant are entitled to any additional benefits (otehr than benefit accruals relating to the period of qualified military service) provided under the plan had the participant resumed and then terminated employment on account of death."
This Act also affects Code sections 32(c)(2)(B) on Earned Income, and 414(u) by adding 414(u)(9) on Treatment in the Case of Death or Disability Resulting from Active Military Service (the current 414(u)(9) and 414(u)(10) are renumbered to 414(u)(10) and 414(u)(11)).
Code section 3401 is amended by adding 3401(h) on "Differential Wage Payments to Active Duty Members of the Uniformed Services". Section 408A is amended to include Military Death Gratuity as part of the qualified rollover contribution and as part of Education Savings Accounts.
This bill impacts qualified military service definitions for qualified plans for both compensation and distributions. Section 104 of the Act adds Section 401(a)(37) to the Code on "Death Benefits Under USERRA-Qualified Active Military Service". It states:
"(37) Death Benefits Under USERRA-Qualified Active Military Service. - A trust shall not constitute a qualified trust unless the plan provides that, in the case of a participant who dies while performing qualified military service (as defined in section 414(u)), the survivors of the participant are entitled to any additional benefits (otehr than benefit accruals relating to the period of qualified military service) provided under the plan had the participant resumed and then terminated employment on account of death."
This Act also affects Code sections 32(c)(2)(B) on Earned Income, and 414(u) by adding 414(u)(9) on Treatment in the Case of Death or Disability Resulting from Active Military Service (the current 414(u)(9) and 414(u)(10) are renumbered to 414(u)(10) and 414(u)(11)).
Code section 3401 is amended by adding 3401(h) on "Differential Wage Payments to Active Duty Members of the Uniformed Services". Section 408A is amended to include Military Death Gratuity as part of the qualified rollover contribution and as part of Education Savings Accounts.