Reserve Component Tax Deductions for Soldiers and Employers

Reserve Component Tax Deductions for Soldiers and Employers

August 06, 2002

With increased responsibility and deployments since the end of the Cold War, reserve component readiness has become a serious matter for national security. The Army’s greater reliance on reserve soldiers, especially after the 11 September 2001 attacks on the United States, has increased training missions and real-world operations for America’s citizen-soldiers. Despite shouldering a greater load, reservists’ financial well-being has been hindered by restrictions and oversights in the U.S. tax code.Under the Tax Reform Act of 1986, reserve soldiers have had to pay for duty-related travel, lodging and food expenses out of pocket, with limited options for income tax deductions. Additionally, reservists’ employers have received no reprieve from the federal government for costs incurred due to an employee’s absence for military obligations.In three bills submitted to the House of Representative (H.R.394, H.R.968 and H.R.3756) and two to the Senate (S.540, S.2802 and S.2816), proposals have been made to reform the issues of reserve tax credits, relief and assistance. For an element vital to the Army today and in the future, these beneficial revisions are long overdue and demand support.