The GRACE for Military Survivors Act extends the deadline for military families to deposit death benefits into certain tax-advantaged retirement and education savings accounts. Currently, families have one year to contribute military death benefits received under federal law into Roth IRAs or Coverdell education savings accounts, but this bill extends that window to three years. The bill applies to military families who have received survivor benefits since October 7, 2001, and gives them until the later of three years from when they received the benefits or one year after the bill becomes law to make these contributions. This change gives military survivors more time and flexibility to decide how to save these death benefits for retirement or their children's education without facing tax penalties for missed deadlines.
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