Lawmakers propose tax credit to encourage more military spouse employment
Stars and Stripes March 1, 2023
WASHINGTON — Congressional lawmakers want to amend the federal tax code to encourage employers to hire military spouses, arguing the revision would help address one of the top issues affecting active-duty families.
A bill introduced Wednesday in the Senate would make employers of spouses of service members eligible for the work opportunity tax credit, an incentive available to companies who hire individuals from groups facing significant barriers to employment.
Unemployment for military spouses has hovered at about 21% for years, according to Defense Department data.
“It is common for military spouses to struggle to find employment due to relocation and other factors,” bill co-sponsor Sen. Maggie Hassan, D-N.H., said in a statement. “This business tax credit is a commonsense and concrete way to help our military families.”
The credit currently applies to qualified veterans, ex-felons and members of other targeted groups. The maximum tax credit is generally $2,400, according to the Internal Revenue Service.
Military spouse employment is the top issue impacting active-duty families and a major contributor to financial stress, according to a 2021 survey by the nonprofit organization Blue Star Families.
Research by the U.S. Chamber of Commerce Foundation and Syracuse University shows military spouses make up one of the most unemployed and underemployed sectors of the job force, with an unemployment rate up to four times higher than their civilian counterparts.
Unemployed spouses spend an average of 19 weeks searching for work, according to a 2021 Defense Department survey. Out-of-work spouses surveyed by Blue Star Families cited multiple reasons for not having a job, including their spouse’s unpredictable and demanding work schedule, expensive child care and the disruption of uprooting their lives for a relocation.
“My mother was a military spouse, and I am keenly aware of challenges facing partners of active-duty service members, who often have to relocate their families long distances,” said Rep. Don Beyer, D-Va., who introduced a companion bill in the House.
The longer spouses are out of work, the more negatively their financial future is affected. Spouses told researchers that they struggled to find careers that paid competitive salaries matching their skill level and worried about saving enough for retirement. Half of the spouses surveyed by Blue Star Families said their military affiliation prevented them from receiving a promotion.
The vast majority of military spouses — 87% — are women and between 26 and 40 years old, according to the Defense Department survey. About 31% earned bachelor’s degrees and 18% have an advanced degree. Most employed spouses, about 62%, are employed within their area of education or training, according to the Defense Department.
The proposed tax credit legislation is led by a bipartisan group of lawmakers, including Sens. Tim Kaine, D-Va., and John Boozman, R-Ark. Beyer, a member of the tax-writing House Committee on Ways and Means, said he was confident the measure would win support from the panel.
“Our legislation would make important changes to the tax code to overcome hurdles to employment that disproportionately affect military spouses, and show military families that their service to the nation is valued,” he said in a statement. “I will continue working with my colleagues in both parties to advance it in the current session.”