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Benefit overview

The Heroes Earnings Assistance and Relief Tax Act of 2008, or HEART Act, provides tax benefits to surviving family member of service members who die on active duty, and it provides tax and pension benefits to service members who become disabled while on active duty for more than 30 days.

Those eligible to receive this benefit have 12 months from the date they are paid the death gratuity or Servicemembers’ Group Life Insurance payments, or SGLI, to use it.

How this benefit helps

Benefits may include:

  • Accelerated vesting in retirement plans
  • Additional life insurance benefits
  • Survivor benefits, such as investment of the death gratuity and SGLI payments into Roth IRAs and Coverdell education savings accounts, or CESA, without ordinary contribution limitations
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The HEART Act allows survivors to roll over their payments

The HEART Act allows survivors to roll over their death gratuity and insurance payments into tax advantaged accounts, helping ensure their financial security. However, according to the IRS, death gratuity and SGLI payments may be rolled over into a Roth IRA or CESA only if the contribution is made before the end of the 12-month period from when the beneficiary receives those payments.

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The HEART Act can help you financially

To take advantage of the benefits of the HEART Act, you will need to use a private financial institution and must have or will need to obtain an IRA account or a CESA. The initial contribution may be withdrawn from a Roth IRA account at any time with no penalty.

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