Tax Relief for First Responder Beneficiaries Act

Overview

Tax Relief for First Responder Beneficiaries Act (HR 9308) aims to provide tax relief related to death benefits and survivor benefits for public safety officers and their beneficiaries. The bill modifies how certain compensation and survivor benefits are treated for federal income tax purposes, with an effective date applying to taxable years beginning after December 31, 2022.

Key Provisions

• Exclusion of certain compensation for survivors/beneficiaries (Section 2):

  • Amends Internal Revenue Code section 104(a)(6) subparagraph (B) by replacing the term “surviving dependents” with “surviving beneficiaries.”
    
  • Purpose: To expand or clarify the group of individuals who can receive tax-exempt compensation related to public safety officers’ death benefits.
    
  • Effective date: Applies to taxable years beginning after December 31, 2022.

• Survivor annuity benefits for public safety officers and their beneficiaries (Section 3):

  • Amends Internal Revenue Code section 101(h)(1) subparagraph (A) by striking “a child of such officer” and inserting “a child or a beneficiary of any life insurance policy or benefit plan of such officer.”
    
  • Purpose: To broaden eligibility for survivor annuity benefits to include beneficiaries of life insurance policies or benefit plans of the officer, in addition to or instead of only children.
    
  • Effective date: Applies to taxable years beginning after December 31, 2022.

Who Is Affected

• Public safety officers: The bill directly targets compensation and benefits related to death and survivor annuities for officers (police, fire, etc.).
  
• Beneficiaries: Expands the group of eligible recipients to include “surviving beneficiaries” of life insurance policies or benefit plans, beyond just children or surviving dependents. This includes individuals who would receive benefits from officer life insurance or related plans.
  
• Taxpayers filing after 2022: The changes apply to taxable years beginning after December 31, 2022.

Practical Impact

• Potentially broader tax-exempt treatment for certain death benefits and survivor annuity payments to a wider set of beneficiaries.
• Families and beneficiaries of public safety officers may receive more favorable tax treatment on death-related benefits and life-insurance-linked annuities.
• For taxpayers and benefit administrators, the changes require applying the revised definitions when determining tax-exempt status of compensation and annuity payments.

Procedural and Timeline Details

• Introduction date: June 11, 2026.
  
• Referral: House Committee on Ways and Means.
  
• Effective date: Taxable years beginning after December 31, 2022 (retroactive to that date, per the bill’s text).

Summary

HR 9308 seeks to broaden tax relief related to public safety officers’ death benefits by expanding who is considered a qualifying recipient of tax-exempt compensation and survivor annuities. It replaces references to “surviving dependents” with “surviving beneficiaries” and enlarges eligibility for survivor annuities to include beneficiaries of life insurance policies or benefit plans, with retroactive applicability to years after 2022.