GRACE for Military Survivors Act

Bill Number

H.R. 9489

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-06-25: Referred to the House Committee on Ways and Means.

Last Updated

2026-07-07T17:03:52Z

AI-Generated Summary

GRACE for Military Survivors Act (H.R. 9489)

Purpose

The legislation aims to give survivors of U.S. military personnel more time to deposit death benefits into tax-advantaged accounts. It extends the window for contributions from these benefits to Roth IRAs and Coverdell education savings accounts.

Key Provisions

• Extension of contribution period: Amends the Internal Revenue Code to change the allowed timeframe from 1 year to 3 years after receipt of benefits under section 1477 of title 10 or section 1967 of title 38.
• Retroactive application: Allows contributions for benefits received on or after October 7, 2001, but before the law's enactment, if made by the later of 3 years after receipt or 1 year after enactment.
• Future application: The new 3-year period applies to benefits received on or after the date the law is enacted.

Significant Changes to Existing Law

• Updates sections 408A(e)(2)(A) and 530(d)(9)(A) of the Internal Revenue Code of 1986 by replacing the "1-year period" with a "3-year period."
• Introduces a limited retroactive relief provision for earlier benefit recipients, which was not available under prior rules.

Potential Impacts

• On citizens: Military survivors gain additional flexibility to use death benefits for long-term tax-advantaged retirement or education savings without immediate tax consequences.
• On government agencies: The IRS would administer the extended contribution rules, potentially requiring updates to guidance or forms for affected accounts.
• On international relations: No direct effects identified.

Main Stakeholders Affected

• Families and survivors receiving military death benefits.
• Holders of Roth IRAs and Coverdell education savings accounts.
• The Internal Revenue Service, responsible for tax code enforcement.

Notable Legal, Constitutional, or Political Implications

• The bill creates a retroactive adjustment to contribution deadlines, which could affect prior tax filings but operates within standard congressional authority over tax policy.
• No apparent constitutional issues arise from the amendments to the Internal Revenue Code.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Thompson, Mike [D-CA-4]

Cosponsors (15)

Rep. Steube, W. Gregory [R-FL-17], Rep. Vargas, Juan [D-CA-52], Rep. Bergman, Jack [R-MI-1], Rep. Ellzey, Jake [R-TX-6], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Buchanan, Vern [R-FL-16], Rep. Sewell, Terri A. [D-AL-7], Rep. Harrigan, Pat [R-NC-10], Rep. Moore, Gwen [D-WI-4], Rep. Kiggans, Jennifer A. [R-VA-2], Rep. Thanedar, Shri [D-MI-13], Rep. Van Orden, Derrick [R-WI-3], Rep. Golden, Jared F. [D-ME-2], Del. Moylan, James C. [R-GU-At Large], Rep. Davis, Donald G. [D-NC-1]

Recent Actions

• 2026-06-25: Referred to the House Committee on Ways and Means.
• 2026-06-25: Introduced in House
• 2026-06-25: Introduced in House

Bill Versions

• GRACE for Military Survivors Act — issued 2026-06-25 — PDF (3 pages)