Saturday, April 27, 2019

Gold Star Families hit by huge tax increases on benefits?

Gold Star widow "shocked" by new tax bill on sons' survivor benefits

CBS News
April 25, 2019
Because a surviving spouse can't receive both Veteran Affairs and Defense Department benefits simultaneously in full, Gold Star parents often sign the taxable DOD benefits over to their children. But the new tax law lumps Gold Star children into a bracket known as the "kiddie tax" at 37 percent, much higher than their previous tax rate.
Coronado, Calif. — Many Americans were shocked by their tax bills this month. The new law was especially costly for our nation's Gold Star families, who saw the taxes owed on their survivor benefits skyrocket.

Theresa Jones has been a single mom to Anthony and Hunter for almost six years. Her husband Landon, a Navy chopper pilot, died in the Red Sea during Operation Enduring Freedom in 2013.

It's been a challenge for Jones, especially financially. They've been able to stay afloat because of the survivor benefits they receive, aid that came with an unexpected surprise at tax time.

"When I saw that tax bill I was shocked at how much these boys owed on benefits that were given to them," Jones said.

The boys each received about $15,000 in survivor benefits last year. Jones was hit with a tax bill of $5,400 for them, up from $1,100 from the previous year.
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