Non-profit seeks better tax treatment for feds

A nonprofit membership association representing more than 300,000 current and former federal employees is calling on Congress to make the tax code friendlier to civil servants.

On Monday, the National Association of Active and Retired Federal Employees (NARFE) sent a letter to Sen. Orrin Hatch (R-UT), chairman of the Senate Finance Committee, laying out a series of policies the organization hopes will gain consideration when Congress attempts to tackle tax reform later this year. Among the changes proposed are making combat pay exempt from taxation for civilian civil servants working in a war zone, treating Civil Service Retirement System payments the same as Social Security payments and making it easier for federal employees to use pre-tax dollars to pay for medical and long term care.

“[W]e offer the following proposals as you work to craft tax reform legislation which promotes economic health and well-being and is guided by fairness and equity in the distribution of both the burden and health benefits of the nation’s tax code,” wrote Richard Thiessen, the organization’s president.

Some of the proposals listed in Thiessen’s letter have already been introduced as bills in Congress this year, including the Federal Employee Combat Zone Tax Parity Act, introduced in June by Rep. Robert Wittman (R-VA) and Rep. Gerry Connolly (D-VA). Both congressmen represent districts with large number of federal employees. In a joint statement, Wittman and Connolly said civilian workers in combat zones should receive the same tax considerations as members of the military.

“Members of our federal workforce serve in combat zones to support essential defense, diplomatic, and development missions abroad. Often, they stand shoulder-to-shoulder with members of our military,” said Connolly. “This legislation would extend a temporary tax benefit similar to the one received by service members to the dedicated federal employees who willingly risk their lives for our country in combat zones around the world.”

That bill was referred to the Ways and Means Committee in June.

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