TAXES/SOCIAL SECURITY Committee Legislative Goals for 2009

Authorize Tax Credits for Employers of Reservist/Employees - Support by employers of members in the Reserve Component enables the Total Force to accomplish today's missions. Employers of Guardsman and Reservists are often burdened with extra costs to support National Defense through the participation of their employees in the military. Today's increased utilization of Reserve Components and OPTEMPO makes employer support more important than ever. Employer pressure is listed as one of the top reasons why Reservists quit. The following tax credits will help offset employer costs associated with employees' Reserve activities and reinforce employer support.

• A permanent tax credit for employers continuing to pay activated Guard and Reserve employees up to 2 years
• A tax credit for businesses owners who hire temporary workers to fill-in for activated employees
• A tax credit to help small business owners to continue an employee’s healthcare, providing an option to TRICARE in areas not covered by the military health network

Authorize Tax Deductions for Premiums Paid on Health Insurance - Seek legislation allowing service members, retirees and survivors to pay health insurance premiums for TRICARE supplements and the DoD sponsored TRICARE dental plans, on a pre-tax basis as is already permitted for Federal civilian and those who participate in a "cafeteria plan" offered by a civilian employer. Also, seek authorization for TRICARE Prime enrollment fees for retired beneficiaries to be paid on a pre-tax basis.

Implement Uniformed Service Member Flexible Spending Accounts – Seek legislation directing DoD to implement Flexible Spending Accounts for service members enabling military families to pay health care (insurance deductibles, pharmacy co pays, glasses and contacts, dental deductibles/co pays, over-the-counter medications, etc.) and childcare expenses with pre-tax dollars. Federal civilians are authorized to have these accounts. (Joint Goal with the Health Care and Personnel, Compensation and Commissaries Committees)

Authorize "Flexible Spending Account" claims filing for a prior reporting year after return from active duty for mobilized Guard and Reserve members.

Improve Above-The-Line Deduction for Overnight Travel Expenses of Guard and Reserve Members - Restoration of full tax-deductibility of non-reimbursable expenses related to military training was accomplished in the FY04 NDAA using a distance of 100 miles. As other government agencies use a 50 mile provision for travel compensation, Internal Revenue Code Section 62(a)(2)(A) should be changed so that "the deductions allowed…for any period during which such individual is more than 50 miles away from home in connection with such services."

Authorize Tax Deductions for Long Term Care (LTC) Premiums - Group long term care insurance has been approved for federal employees and uniformed services members - active, reserve, and retired. Their family members also need protection against the unforeseen cost of custodial care services that might be needed as a result of a disabling condition. LTC is a self-funded program. In order to promote enrollment in a commercial or the new government LTC insurance plan, it has been suggested that the cost of premiums be allowed as a deductible on personal federal income tax for qualified long-term care insurance plans.

Extend Combat Zone Tax Credit to USPHS and NOAA Officers - Officers of the PHS and NOAA Commissioned Corps serve alongside their armed service peers in combat zones around the world. The Department of State is currently seeking additional PHS physicians for service in Iraq and Afghanistan. Yet PHS and NOAA officers were inadvertently omitted from legislation years ago establishing a tax credit for armed services members serving in combat zones - a rare exception to the compensation and benefits parity among the seven uniformed services normally the intent of the Congress.

Authorize Tax Incentives for Employers hiring Demobilized Service Members and AC/RC Military Spouses - Service men and women need a smooth transition from military duty to civilian life, or when transferred between bases. The service man or woman's family is an integral part of that transition. Financial stability is key. Employment of military spouses as well as re-employment of the serving member is considered a critical element in recruiting and retaining a high quality all volunteer force. TMC supports:

• Expanding the Workforce Opportunity Tax Credit to giving employers tax credits who:
• Hire military spouses of both Active and Reserve components
• Hire demobilized service members
• Providing tax credit to offset expenses by military spouses who must obtain professional or trade license or certification when the Active or Reserve service member is relocated to a state where the spouse is no longer qualified to work in that profession or trade.

Reform Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) - Repeal or reform the WEP and GPO Social Security penalties for federal employees and spouses (many of whom are military retirees and spouses) under the Civil Service Retirement System and certain state retirement systems. WEP reduces Social Security benefits earned by these members and spouses from military service or other employment. The GPO reduces or in some cases eliminates Social Security survivor benefits for spouses who are also federal/state retirees.