Date: May 20, 2008
House Passes H.R. 6081, the “Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008”
On May 20, 2008, the House of Representatives passed H.R. 6081, the “Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008,” by a vote of 403 - 0. H.R. 6081 is similar to H.R. 3997, different versions of which passed the House and the Senate last year. (See Legislative Bulletins 110-15 and 110-16.)
The new version of the HEART Act contains the following provisions of interest to SSA:
Taxable Wage Exclusions for Volunteer Firefighters and Medical Responders
• Would amend the Internal Revenue Code and the Social Security Act to exclude from FICA taxable wages any property tax rebate or other qualified benefit provided to volunteer firefighters and emergency medical responders in return for labor services. The IRS has previously ruled that such payments constitute compensation for services performed. Would be effective as if included in Section 5 of the Mortgage Forgiveness Debt Relief Act of 2007 (i.e., January 1, 2008).
Military and National Service Related Changes to the SSI Program
• Would treat most cash military compensation as earned income for SSI purposes, thus allowing the service member to benefit from the SSI program's more favorable consideration of earned income.
• Would codify SSA's policy regarding consideration of privatized military housing allowances. In situations where the allowance is withdrawn directly from a service member's pay by military payroll and paid to the landlord, the allowance would be considered in-kind income and the SSI benefit reduction attributable to the housing allowance would be capped at one-third of the Federal Benefit Rate. In other cases, housing allowances would be considered earned income.
• Would exclude State-provided pensions for aged, blind or disabled veterans (or their spouses) from income consideration for SSI purposes. Such payments would also be excluded as a resource for SSI purposes.
• Would exclude any cash or in-kind benefits provided under an AmeriCorps program from income consideration for SSI purposes. Under current law, AmeriCorp VISTA payments are already excluded from such consideration, but AmeriCorps National Civilian Community Corps and Americorps State/National program payments are countable.
• All SSI-related provisions would be effective for benefits payable for months beginning 60 days after enactment.
Consideration of Offshore Companies for FICA Tax Purposes
- Would end the practice of U.S. government contractors setting up shell companies in foreign jurisdictions to avoid payroll taxes. The legislation amends the Internal Revenue Code and the Social Security Act to treat foreign subsidiaries of U.S. companies performing services under contract with the United States government as American employers for the purpose of Social Security and Medicare payroll taxes. This change would affect U.S. citizens and U.S. residents working for these subsidiaries. Would be effective upon enactment.