A military tax relief bill was signed into law on Veteran's Day 2003 by President Bush.

H.R. 3365, the Military Family Tax Relief Act, targets relief to family members of the U.S. Armed Forces serving in Iraq and other areas.

Among other things, the bill increases the death gratuity benefit paid to families of military personnel who die while on active duty, from $6,000 to $12,000 and exempts the entire amount from federal tax. This provision applies to all those on active duty to include Reservists and National Guard members who have been mobilized for active duty. The death gratuity also applies to those who die within 120 days after being medically released from active duty for an injury or illness suffered while on active duty. The provision is retroactive to 9/11/2001.

For more information on the Military Family Tax Relief Act, click on the following link:
http://tax.cchgroup.com/news/militaryreliefact2003.pdf

• December 12, 2003 - IRS Notifies Military Personnel of Favorable Tax Law Changes

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