H.R. 5044: Andrew P. Carpenter Tax Act, as amended

H.R. 5044

Andrew P. Carpenter Tax Act, as amended

Date
September 19, 2012 (112th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Wednesday, September 19, 2012, the House is scheduled to consider H.R. 5044, the Andrew P. Carpenter Tax Act, as amended, under a suspension of the rules requiring a two-thirds majority vote for approval.  The bill was introduced on April 27, 2012, by Rep. Scott DesJarlais (R-TN) and referred to the Committees on Ways and Means. 

Bill Summary

H.R. 5044 would provide tax relief from any amounts of private educational loans forgiven for service members who lost their lives in the line of duty since the beginning of Operation Enduring Freedom in October of 2001.

The bill would also eliminate an apparent conflict that exists in current law between the Federal Employees’ Retirement System Act of 1986 (FERSA) and the Internal Revenue Code.  The change would subject certain assets in Thrift Savings Plan accounts to federal tax levies when necessary for the purpose of collecting unpaid federal taxes.  This provision is included as a budgetary offset.

Background

Andrew Carpenter was a Marine killed in Afghanistan in February of 2011.  Four years prior, his parents were cosignatories on student loans from a private lender.  The lender forgave the loan, but the family would be required to pay taxes upon the amount forgiven, which is considered gross taxable income under current law. 

Cost

According to the Joint Committee on Taxation (JCT), the Thrift Savings Fund tax levy would increase revenues by $24 million over the 2012-2022 period, which exceeds the estimated $7 million revenue loss from the servicemember loan forgiveness provision.