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Cotton Co-Sponsors Legislation to Make Disability Separation Payments for Combat-Injured Veterans Tax-Exempt

June 29, 2016

Contact: Caroline Rabbitt (202) 224-2353

Washington, D.C.- Senator Tom Cotton (R-Arkansas) today released the following statement after co-sponsoring the Combat-Injured Veterans Tax Fairness Act of 2016, legislation originally introduced by Senator John Boozman (R-Arkansas) that would make disability separation payments for combat-injured veterans exempt from taxation:

"When a soldier, sailor, airman or Marine is deployed in harms way, we make their basic pay and other combat-zone entitlements tax-free, and we should do the same for payments earned as a consequence of combat. These men and women have incurred injuries that will be with them for a lifetime, the last thing they should have to worry about is the impact our tax policies will have on their disability compensation. As a veteran with many friends and colleagues who have been forced in retirement due to injuries sustained taking the fight to the enemy, I am extremely grateful for Senator Boozman's efforts on such a critical issue for injured veterans. I will continue to support his efforts to pass this bill in the Senate and send it to the President's desk for a signature."

Background: Currently, service members are taxed for disability severance payments for "line of duty" injuries. This payment is awarded to an injured combat veteran who, because of their wounds, is medically retired, and is a one-time lump-sum payment. The Combat-Injured Veterans Tax Fairness Act of 2016 (S. 2712) would exempt that payment from taxation.