Number: 110-28
Date: June 20, 2008

President Signs P. L. 110–245, the
“Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008”

On June 17, 2008, President Bush signed into law H.R. 6081, the “Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008,” (Public Law 110-245). The House of Representatives passed H.R. 6081 on May 20, 2008, by a vote of 403-0. On May 22, 2008, the bill passed the Senate without amendment by unanimous consent.

The following provisions are of interest to SSA:

Taxable Wage Exclusions for Volunteer Firefighters and Medical Responders

•  Amends the Internal Revenue Code and the Social Security Act to exclude from FICA taxable wages any property tax rebate or other qualified benefit provided to volunteer firefighters and emergency medical responders in return for labor services. The IRS had previously ruled that such payments constitute compensation for services performed. Effective as if included in Section 5 of the Mortgage Forgiveness Debt Relief Act of 2007 (i.e., January 1, 2008).

Military and National Service Related Changes to the SSI Program

•  Treats most cash military compensation as earned income for SSI purposes, thus allowing the service member to benefit from the SSI program's more favorable consideration of earned income.

•  Codifies SSA's policy regarding consideration of privatized military housing allowances. In situations where the allowance is withdrawn directly from a service member's pay by military payroll and paid to the landlord, the allowance will be considered in-kind income and the SSI benefit reduction attributable to the housing allowance will be capped at one-third of the Federal Benefit Rate. In other cases, housing allowances will be considered earned income.

•  Excludes State-provided pensions for aged, blind or disabled veterans (or their spouses) from income consideration for SSI purposes. Such payments will also be excluded as a resource for SSI purposes.

•  Excludes any cash or in-kind benefits provided under an AmeriCorps program from income consideration for SSI purposes. Prior to the HEART legislation, AmeriCorp VISTA payments were excluded from such consideration, but AmeriCorps National Civilian Community Corps and AmeriCorps State/National program payments were countable.

•  All SSI-related provisions are effective for benefits payable for months beginning 60 days after enactment.

Consideration of Offshore Companies for FICA Tax Purposes

  • Ends the practice of U.S. government contractors setting up shell companies in foreign jurisdictions to avoid payroll taxes. The legislation amends the Internal Revenue Code and the Social Security Act to treat foreign subsidiaries of U.S. companies performing services under contract with the United States government as American employers for the purpose of Social Security and Medicare payroll taxes. This change affects U.S. citizens and U.S. residents working for these subsidiaries. Effective upon enactment.