New Bill Offers Financial Help to Reservists, Employers
March 25, 2005--Some long-overdue financial help for employees who are activated for Guard and Reserve duty, and the companies that employ them, may be on the way from Washington before the end of the year.
Senator Mary Landrieu's (D-La.) Hope at Home Act was unanimously approved by the Senate earlier this month and is now in the House awaiting approval.
"The unanimous approval in the Senate will hopefully send a message to the House that this needs to get done," Adam Sharp, a spokesman for Sen. Landrieu's office, said. "We ask so much from these troops, they deserve as much help from us as we can give them."
The bill proposes a 50% tax credit to companies that compensate for the difference between the salary paid to an employee and the salary the military will pay once activated, a difference that is all too often several thousand dollars. For example, if an employee makes $60,000 as a civilian employee, and gets called to duty for a military salary of $40,000, a company that makes up that $20,000 difference will receive a $10,000 tax credit on that employee.
"It's not a tax write off," Sharp said. "It's like money in the bank."
The act also proposes a similar plan for Federal employees as well as a tax credit to companies that are forced to hire a replacement for an activated employee.
According to the Government Accountability Office, 40% of the troops serving in Iraq and Afghanistan are members of the Guard or Reserves (about 600,000 troops), and of those, 41% (about 246,000) take a pay cut to serve.
"The fact that so many these troops serve and take a pay cut to do so is just unacceptable," Sharp said.
The overall cost for the act will be around $1.9 billion over 10 years. If approved in the 109th Congress, the bill is expected to be quickly pushed through the Senate in order to roll it our by January 2006.
"Our Guard and Reservists put their lives on the line... they should be first in line when it comes to tax relief," Sen. Landrieu said.