GRACE for Military Survivors Act

119th Congress Introduced by Jack Bergman and 10 co-sponsors

Extends the contribution window for military death benefits to Roth IRAs and Coverdell ESAs from 1 year to 3 years.

Introduced in House

GRACE for Military Survivors Act (H.R. 9489) – Summary

Purpose

The GRACE for Military Survivors Act aims to extend the time period allowed to contribute certain military death benefits to two tax-advantaged accounts: Roth IRAs and Coverdell Education Savings Accounts (ESAs). Specifically, it lengthens the contribution window from 1 year to 3 years.

Key Provisions

Extension of contribution window:

For Roth IRAs: The allowed period to contribute military death benefits under Internal Revenue Code Section 408A(e)(2)(A) is changed from a 1-year period to a 3-year period.
For Coverdell ESAs: The allowed period to contribute military death benefits under Internal Revenue Code Section 530(d)(9)(A) is changed from a 1-year period to a 3-year period.

Effective dates and transitional rules:

The amendments apply to amounts received under:
Section 1477 of Title 10, U.S. Code (military death benefits), or
Section 1967 of Title 38, U.S. Code (military/veteran-related benefits),
on or after the date of enactment of the Act.
For contributions made with respect to amounts received between October 7, 2001 and the enactment date, the changes apply if:
The contribution is made before the later of:
- The date which is 3 years after the date the amounts were received, or
- The date which is 1 year after the date of enactment of the Act.
This provides a transitional alignment for prior receipts and allows up to three additional years (subject to the later-of-timelines) to make eligible contributions.

Who/What is Affected

Beneficiaries and account holders: Service members’ or deceased service members’ survivors entitled to military death benefits, and individuals who would contribute those benefits to Roth IRAs or Coverdell ESAs.

Tax-advantaged accounts: Roth IRAs and Coverdell ESAs receive extended contribution windows for these specific types of military death benefits.

Procedural and Timeline Considerations

Legislative status: Introduced June 25, 2026; referred to the House Ways and Means Committee.

Sponsorship: Primary sponsor is Mr. Thompson (CA) with multiple co-sponsors representing a bipartisan mix.

Effective date: The extension applies to benefits received on or after enactment of the bill, with a transitional rule for amounts received earlier (2001) but contributed by the later of three years after receipt or one year after enactment.

Practical Impact

Survivors and beneficiaries will have more time to decide how to allocate military death benefits into Roth IRAs or Coverdell ESAs, potentially improving tax treatment or education savings planning.

The expansion from a 1-year to a 3-year window reduces the urgency to make contributions and may increase the likelihood that more funds are placed into tax-advantaged accounts.

If you’d like, I can compare this bill to current law text or provide scenarios illustrating how the extended window would work for specific dates of receipt.