Peters Applauds Extension of Tax Credit for Businesses Employing Military Reservists & National Guardsmen
Peters Previously Introduced Bipartisan Bill Extending Tax Credit to Employers that Provide Differential Pay to Reservists Called to Active Duty
WASHINGTON, DC – U.S. Senator Gary Peters (MI), a former Lieutenant Commander in the U.S. Navy Reserve, today applauded the expansion and permanent extension of a tax credit for employers that provide differential pay to military reservists and National Guard members called to serve on active duty. The tax credit, which was included in an end-of-year government spending and tax bill, would apply to all businesses, but the extension is particularly helpful for small businesses that may find it more difficult to absorb the costs of providing differential pay. Earlier this year, Peters introduced the Military Reserve Small Business Jobs Act with Senator Joni Ernst (R-IA), a former Lieutenant Colonel in the Iowa Army National Guard, to extend this tax credit for small businesses for five years, providing financial security for the families of Reservists and National Guardsmen serving on active duty.
“Michigan reservists and National Guardsmen stand ready to defend our nation at a moment’s notice and play a critical role in keeping our military strong,” said Senator Peters. “When called to active duty, our servicemembers should not be forced to worry about how their families will pay for groceries or put gas in the car. We should reward employers and businesses that show their patriotism by providing differential pay to employees called to active duty, and I am pleased that this legislation permanently extending and expanding this important tax credit will soon be signed into law.”
There are approximately 824,000 reservists and National Guard members in America, and 15,438 of them serve in units in Michigan. Since September 11, 2001, over 905,000 reservists and National Guard members have been activated in support of the wars in Iraq and Afghanistan.
Originally enacted in 2008 as part of the bipartisan Heroes Earnings Assistance and Relief Tax Act (HEART Act), the employer wage credit for activated military reservists helps employers that provide differential pay to employees who have been called to active duty. Previously, employers with 50 employees or less received a tax credit for 20% of the differential salary payment for their workers. For example, if an employee’s pay is $3,000 per month but they make $2,000 while on active duty, the employer would receive a $200 credit for paying them the $1,000 difference.
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