First responder families get wider tax break on death benefits
S. 4497 — Tax Relief for First Responder Beneficiaries Act · Filed by Kirsten Gillibrand (D-NY) · 1 cosponsor · Introduced May 12, 2026 · Referred to committee
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What it does
This bill expands tax-free death benefits for public safety officers' families by broadening who qualifies as a beneficiary under two tax code sections. It changes 'surviving dependents' to 'surviving beneficiaries' in one rule and expands 'a child' to include 'a child or a beneficiary of any life insurance policy or benefit plan' in another, making the tax exclusion available to a wider circle of people named in officers' policies or plans. The changes apply retroactively to 2023 and later.
Why we flagged it
The bill's sole operative mechanism is a targeted tax exclusion expansion for death benefits paid to families of public safety officers. It is a straightforward tax-relief measure with no hidden riders or unrelated provisions.
What the text implies
- Retroactive application to 2023 may trigger amended-return claims and refunds for families who already paid tax on these benefits in prior years, creating administrative burden for IRS and potential windfall for some beneficiaries.
- Expansion to 'any beneficiary of any life insurance policy or benefit plan' is broader than traditional dependent definitions and may include non-family members, trusts, or entities named in policies—creating potential tax-planning opportunities.
The full analysis lists 3 implications of this text.
Who stands to gain
families of deceased public safety officers; named beneficiaries of officers' life insurance policies