# Coast Guard Combat-Injured Tax Fairness Act

This bill addresses a tax issue affecting Coast Guard members who have been injured in combat. Here's what's happening: when Coast Guard personnel receive disability compensation for combat-related injuries, that money is currently being taxed as regular income. The bill changes this so that combat-injured Coast Guard members can exclude this disability compensation from their taxable income, just like members of the Army, Navy, Air Force, and Marines already can.

Right now, there's an unfair gap in the tax code. If you're a soldier, sailor, or Marine who gets injured in combat, your disability payments aren't taxed. But if you're in the Coast Guard and suffer a combat injury, you have to pay federal income tax on those disability payments. This bill closes that loophole by giving Coast Guard members the same tax break that other military branches receive. It's essentially saying that combat-related disability compensation shouldn't be treated as taxable income for anyone in uniform, regardless of which branch they serve.

The practical impact is straightforward: Coast Guard members with combat-related disabilities will keep more of their disability money instead of sending it to the IRS. This recognizes that these payments are compensation for sacrifice and injury in service to the country, not regular income that should be taxed. The bill brings the Coast Guard into alignment with how the rest of the military is already treated in the tax code, eliminating what many see as an unfair distinction between service branches.

Coast Guard Combat-Injured Tax Fairness Act

Cassidy, Bill

Coast Guard Combat-Injured Tax Fairness Act This bill extends a tax benefit related to combat-related severance pay to veterans of the Coast Guard. Specifically, severance pay amounts that were withheld for tax purposes from veterans with combat-related injuries must be restored to veterans of the Coast Guard.