Momentum Grows in Congress to Overturn Controversial Military 'Widow's Tax'

With momentum growing in Congress to repeal a new tax hike on the families of some deceased service members, military advocates hope this will be the year another surviving military spouse pay issue — the so-called "widow's tax" — ends. Thanks to a rule written into law, many military widows are subject to a pay offset when their Survivor Benefit Plan annuities from the DoD and Dependency and Indemnity Compensation, or DIC, from the VA are decreased for those who receive both, with SBP payments reduced dollar for dollar by the amount received from the VA. The reduction is known as the SBP-DIC offset. More than 66,000 surviving spouses are affected by the offset and — while many receive another payment, a Special Survivor Indemnity Allowance of $318 per month to offset the offset — it doesn't equal the estimated $12,000 lost yearly by those affected. Read more about the effort to eliminate the offset rule on Military.com.