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U.S. Rep. Virginia Foxx (R-N.C.) announced today that she has introduced her first piece of legislation. The Heroes Earned Retirement Opportunities (H.E.R.O.) Act seeks to amend the Internal Revenue Code of 1986 to allow soldiers earning hazard pay to be eligible for retirement account contributions.

Rep. Foxx introduced H.R. 1499 in response to a letter from the father of a soldier who spent most of 2004 in Iraq. The father, from Clemmons, N.C., was frustrated because his son did not earn enough taxable income to take full advantage of Individual Retirement Accounts.

According to the Internal Revenue Code of 1986, combat “hazard pay” is not considered taxable income. This is an important benefit for members of the Armed Forces who risk their lives to protect our freedom. Unfortunately, our heroes are penalized when it comes to contributions to their IRAs.

“If anyone has earned the opportunity to contribute to an IRA, it is these heroes,” said Rep. Foxx.

The H.E.R.O. Act would count hazard pay as taxable income for the purpose of IRA contributions without actually taxing it. This will allow soldiers to make the maximum yearly contribution to their retirement accounts. Rep. Foxx said she believes those who are responsible enough to save should be able to take full advantage of IRAs – especially since they have served their country.

“The purpose of hazard pay is to reward soldiers for their service, just as one goal of our tax code should be to encourage savings,” said Rep. Foxx. “The H.E.R.O. Act is a common sense, fiscally responsible piece of legislation that will help our servicemen and women without costing taxpayers a penny.”

“I want to thank Rep. Foxx for not only listening to a problem that many men and women in uniform face, but moving so quickly to introduce a bill to fix it,” said Spc. Michael Hensley. “On behalf of all soldiers, sailors, airmen and Marines, I thank Virginia Foxx for fighting on our behalf in the United States Congress.”

If the H.E.R.O. Act passes, it will apply to taxable years beginning after December 31, 2004.