I 111th CONGRESS 1st Session H. R. 1624 IN THE HOUSE OF REPRESENTATIVES March 19, 2009 Mr. Bilirakis (for himself and Mr. Carney) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to exclude from the gross income of members of the uniformed services of the United States certain amounts of military basic pay.

1.

Short title

This Act may be cited as the Military Personnel Income Tax Exclusion Act.

2.

Exclusion from gross income for certain amounts of basic pay

(a)

In general

Subsection (a) of section 134 of the Internal Revenue Code of 1986 (relating to exclusion for certain military benefits) is amended to read as follows: (a)

General rule

Gross income shall not include— (1)any qualified military benefit, and (2)so much of the basic pay received for active service as a member of the uniformed services of the United States (which would, but for this paragraph, be includible in gross income) to the extent that the rate of such pay does not exceed the highest rate payable for the E–1 pay grade. . (b)

Excluded amounts counted as income for certain purposes

(1)

Refundable portion of child credit

Paragraph (1) of section 24(d) of such Code is amended by inserting or 134(a)(2) after 112. (2)

Earned income credit

Clause (vi) of section 32(c)(2)(B) of such Code is amended by inserting or 134(a)(2) after 112. (3)

Making work pay credit

Paragraph (2) of section 36A(d) of such Code is amended by inserting or 134(a)(2) after 112. (4)

Retirement savings

Paragraph (7) of section 219(f) of such Code is amended to read as follows: (7)

Special rule for certain compensation earned by members of the Armed Forces

For purposes of subsections (b)(1)(B) and (c), the amount of compensation includible in an individual’s gross income shall be determined without regard to sections 112 and 134(a)(2). . (5)

Withholding

Paragraph (1) of section 3401(a) of such Code is amended to read as follows: (1)for active service performed in a month for which such employee is entitled to the benefits of section 112 (relating to certain combat zone compensation of members of the Armed Forces of the United States) or section 134(a)(2) (relating to certain military benefits) to the extent remuneration for such service is excludable from gross income under section 112 or 134(a)(2), as the case may be.. (c)

Effective date

The amendments made by this section shall apply to amounts paid after December 31, 2008, in taxable years ending after such date.