Sponsors (68)
The bill gives surviving military beneficiaries more time (including retroactive relief) to place death benefits into tax-advantaged retirement and education accounts, improving financial protection for families while modestly reducing near-term federal revenue and adding some administrative complexity for claimants.
Surviving service-members' spouses and children can deposit military death benefits into Roth IRAs up to three years after receipt, giving them more time to preserve tax-advantaged retirement savings.
Families of deceased service members can contribute military death benefits into Coverdell Education Savings Accounts within three years, increasing time to secure tax-advantaged education savings for children.
Veterans' families who received military death benefits since Oct 7, 2001 receive retroactive relief—allowing contributions up to three years after receipt or within one year after enactment—so some who previously missed deadlines can still use tax-advantaged accounts.
Taxpayers (and the federal government) may see reduced near-term tax revenue because allowing later rollovers/contributions defers taxable distributions or accelerates tax-advantaged contributions.
Survivors and taxpayers seeking retroactive relief may face additional administrative burden and complexity (records, coordination with Treasury or tax preparers) to prove eligibility for long-past benefit receipts.
Based on analysis of 2 sections of legislative text.
Extends from 1 year to 3 years the rollover/contribution window for certain military death benefits into Roth IRAs and Coverdell ESAs, with retroactive relief to Oct 7, 2001 under conditions.
Official title: To amend the Internal Revenue Code of 1986 to extend the time period for the contribution of military death benefits to Roth IRAs and Coverdell education savings accounts.
Introduced June 25, 2026 by Michael Thompson · Last progress June 25, 2026
Extends from 1 year to 3 years the time survivors have to roll military death benefit payments under 10 U.S.C. §1477 or 38 U.S.C. §1967 into a Roth IRA or to contribute them to a Coverdell Education Savings Account. The change applies to amounts received on or after enactment and also applies retroactively to amounts received on or after October 7, 2001, if the contribution or rollover is completed within the new 3-year window (with a special deadline tied to enactment).