Fallen Marine’s 11-year-old daughter gets $10K tax bill on survivor’s benefits

National and World

(CNN Newsource) – First, they lost their loved ones. Now they’re being hit with thousands of dollars more in taxes on their survivor’s benefits.

Some Gold Star families are asking Congress to make changes to President Trump’s tax overhaul after they saw higher tax bills because of it.

It’s been almost five years since Elizabeth Davis lost her husband, Matt. He was a Marine first lieutenant and father to Aubrey, who was just 6 when her dad died.

As if that pain wasn’t enough, Aubrey, now 11, has just had to pay $10,000 in taxes on the benefits from her dad’s death.

“It is an absolute betrayal of the families who have already given so much,” Elizabeth said. “This is money that is intended for children who are, essentially, orphaned.”

Elizabeth is one of thousands of Gold Star widows grappling with Trump’s changes to the tax code, which have resulted in a surge in taxes on benefits to families.

“I had a hard time understanding it at first. I thought, ‘For sure,’ like, ‘This figure is wrong. There’s no way she owes that much in taxes.’ But it wasn’t.”

Both the departments of defense and veterans affairs offer benefits to spouses of fallen troops, but the full amounts can’t be received simultaneously — they’re offset against each other.

So parents often put the taxable DOD benefits in their children’s names in order to receive both benefits at the same time.

The new tax code then puts those kids into a bracket known as the “kiddie tax,” smacking them with taxes as high as 37%, which can be triple what it used to be.

“It changes everything financially,” Elizabeth said. “Week to week and month to month.”

She is giving politicians the benefit of the doubt — that they didn’t set out to target military families. But she and others affected say Congress has to fix the problem to allow spouses to receive both benefits in full so they don’t have to put them in their children’s names and get taxed.

“When you are at a military funeral and they are folding up — you know, in my instance — as they’re folding up my husband’s flag off of his casket and the Marine that handed it over to me said, ‘This is on behalf of a grateful nation,’ I’m looking for someone to take care of my daughter and my family in the way that I know my husband would do for this country.”

In a statement, a U.S. Department of Treasury spokesperson said:

“We are deeply grateful for the sacrifices made by our brave service members and their families, and we are evaluating what can be done to solve this issue and provide relief to the families of our fallen heroes.”

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