Federal Employee Combat Zone Tax Parity Act This bill excludes from gross income, for income tax purposes, the compensation of a federal employee who served in a combat zone or was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone. The bill terminates the exclusion two years after the end of combatant activities in such zone.
Impact
If enacted, HB 227 would directly impact the way in which combat zone compensation is taxed, effectively relieving federal employees from the burden of income tax on their earnings while serving in designated combat zones. This amendment aligns the treatment of civilian employees with that of armed forces members, acknowledging the risks and sacrifices made by these employees during their service. The bill also specifies that the exclusion will terminate two years following the end of combatant activities, providing a clear timeframe for when the tax relief would no longer be applicable.
Summary
House Bill 227, known as the Federal Employee Combat Zone Tax Parity Act, proposes an amendment to the Internal Revenue Code aimed at providing tax relief to federal employees who serve in combat zones. The bill seeks to exempt compensation received by federal employees during their active service in a combat zone from being included in their gross income for tax purposes. Additionally, the bill covers employees who are hospitalized due to injuries incurred while serving in such zones.
Contention
Debate surrounding HB 227 may arise from concerns regarding the fiscal implications of providing tax exclusions, as this could lead to decreased federal revenue. Some lawmakers might argue that while the intention is to support federal employees in combat zones, the overall budgetary impact needs to be carefully considered. Additionally, there may be discussions on whether such tax relief is warranted equally for federal civilian employees, compared to military personnel, which could spark broader debates about equity and compensation in federal employment.
Tip Tax Termination Act This bill excludes from gross income for federal tax purposes up to $20,000 of eligible tips received during the tax year. The bill also requires the Internal Revenue Service to modify the tables and procedures used to withhold federal income tax from wages to take into account eligible tips excluded from gross income. The bill defines eligible tips as amounts received while performing services in a position that generally relies on tips as part of wages, including cosmetology, hospitality, and food service.Further, under the bill, the amount of eligible tips excluded from gross income must not be included in determining federal tax deductions or credits, except for purposes of calculating the child tax credit and earned income tax credit.Finally, the exclusion from gross income only applies to eligible tips received before 2030.
Assuring Medicare’s Promise Act of 2023 This bill increases net investment income tax revenues by applying such tax to the trade or business income of certain high income taxpayers and includes the increased tax revenues in the Federal Hospital Insurance Trust Fund.
This bill allows a deduction from gross income (above the line deduction) for attorney fees and court costs awarded with respect to a qualifying wildfire disaster (i.e., any forest or range fire that is a federally declared disaster, occurs in a disaster area, and occurs in 2015 or later). The bill excludes from the gross income of a taxpayer, for income tax purposes, amounts paid to compensate victims for losses or damages in connection with a qualifying wildfire disaster.
Medical Manufacturing, Economic Development, and Sustainability Act of 2023 or the MMEDS Act of 2023 This bill provides incentives for relocating medical manufacturing facilities in the United States and for manufacturing medical products (i.e., drugs and devices) in economically distressed zones. Specifically, the bill allows a income tax credit for 40% of the sum of wages paid in a medical manufacturing economically distressed zone, employee fringe benefit expenses, and depreciation and amortization allowances with respect to qualified medical manufacturing facility property, and a credit for economically distressed zone products and services acquired by domestic medical manufacturers. The bill increases the credit rate for minority businesses.