Senator Mark Pryor Press Releases

WASHINGTON D.C. – In the final hours of the 109th Congress, Senator Mark Pryor today applauded the Senate and House for extending his legislation to correct a discrepancy in the tax code that penalizes lower-income servicemen and women serving in combat situations. The measure was included in the Tax Relief and Health Care Act of 2006.

In 2003, Pryor and Senator Max Baucus (D-MT) along with Senate Finance Committee Chairman Chuck Grassley (R-IA) requested a General Accounting Office (GAO) study into military compensation and its tax treatment. The findings revealed that some lower-income earning military personnel receiving tax exclusions for serving in combat zones were being forced to forfeit other tax advantages, including the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit.

To fix this glitch, Pryor introduced the Tax Relief for Americans in Combat (TRAC) Act. The legislation allows soldiers to treat combat pay – which is not taxed—as income for the purposes of the Child Tax Credit and the Earned Income Tax Credit (EITC). The EITC element of the bill was set to expire this year, but today’s action by the Senate and House extends the credit for another year.

Pryor said he would push for a permanent extension of the legislation in the 110th Congress.

"When it comes to tax relief, our soldiers do not deserve to be penalized,” Pryor said. "Extending this legislation sends a clear message to our brave service members that while they are away fighting for us we will be here in the Senate fighting for them and their families.”

Pryor said that the tax glitch affects as many as 10,000 lower-income soldiers serving in combat zones, who would be penalized by as much as $4,500 for officers and $3,200 for enlisted members.

“This is make-or-break money for our soldiers and their families," said Pryor. "If we allowed this tax benefit to expire we would have shortchanged the men and women serving heroically in combat who are not making much money, have families to provide for, and have little or no savings.”

The combat pay tax provision was included in a larger bill that contained other expiring tax provisions including tax deductions on college tuition, tax breaks for teachers buying classroom supplies, tax incentives for hiring welfare beneficiaries, tax credits for alternative-energy producers and purchasers of solar-energy equipment, and eliminates a 5 percent reduction of Medicare payments to physicians. In addition the bill includes a plan to open up 8.3 million acres of federal land in the Gulf or Mexico for oil and gas drilling, which includes a revenue sharing provision similar to the one offered by Senator Pryor earlier this year.

The President is expected to sign the bill into law.

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		December 11, 2006 Press Release U.S. Congress Extends Pryor’s Tax Measure to Correct Combat Pay Inequity for Servicemen and Women Measure Included in the Tax Relief and Health Care Act WASHINGTON D.C. – In the final hours of the 109th Congress, Senator Mark Pryor today applauded the Senate and House for extending his legislation to correct a discrepancy in the tax code that penalizes lower-income servicemen and women serving in combat situations. The measure was included in the Tax Relief and Health Care Act of 2006. In 2003, Pryor and Senator Max Baucus (D-MT) along with Senate Finance Committee Chairman Chuck Grassley (R-IA) requested a General Accounting Office (GAO) study into military compensation and its tax treatment. The findings revealed that some lower-income earning military personnel receiving tax exclusions for serving in combat zones were being forced to forfeit other tax advantages, including the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit. To fix this glitch, Pryor introduced the Tax Relief for Americans in Combat (TRAC) Act. The legislation allows soldiers to treat combat pay – which is not taxed—as income for the purposes of the Child Tax Credit and the Earned Income Tax Credit (EITC). The EITC element of the bill was set to expire this year, but today’s action by the Senate and House extends the credit for another year. Pryor said he would push for a permanent extension of the legislation in the 110th Congress. "When it comes to tax relief, our soldiers do not deserve to be penalized,” Pryor said. "Extending this legislation sends a clear message to our brave service members that while they are away fighting for us we will be here in the Senate fighting for them and their families.” Pryor said that the tax glitch affects as many as 10,000 lower-income soldiers serving in combat zones, who would be penalized by as much as $4,500 for officers and $3,200 for enlisted members. “This is make-or-break money for our soldiers and their families," said Pryor. "If we allowed this tax benefit to expire we would have shortchanged the men and women serving heroically in combat who are not making much money, have families to provide for, and have little or no savings.” The combat pay tax provision was included in a larger bill that contained other expiring tax provisions including tax deductions on college tuition, tax breaks for teachers buying classroom supplies, tax incentives for hiring welfare beneficiaries, tax credits for alternative-energy producers and purchasers of solar-energy equipment, and eliminates a 5 percent reduction of Medicare payments to physicians. In addition the bill includes a plan to open up 8.3 million acres of federal land in the Gulf or Mexico for oil and gas drilling, which includes a revenue sharing provision similar to the one offered by Senator Pryor earlier this year. The President is expected to sign the bill into law. ###