NEW YORK (AP) Shortly after Yolanda Kilbride's husband was called up for active duty by the Marine Corps, she took advantage of a little-known law to shore up their finances.
First Kilbride called their mortgage company and requested that the interest rate on their loan be reduced to 6 percent. Then she called their bank and made the same request for their credit cards.
After receiving a copy of her husband's orders, both institutions immediately lowered the rates, she said. In fact, her bank dropped the rate on their cards to zero.
It's good for all the time he's on active duty,'' said Kilbride, 46, of Hackettstown, N.J. We're OK financially, but every little bit helps.''
Many of the thousands of men and women whose reserve or National Guard units have been called up may qualify for a variety of benefits provided by federal laws and regulations, from lower interest rates to deferment of taxes and protection from eviction. But the military personnel and their families have to know to ask for them.
With so many troops on active duty and in combat zones, the government as well as nonprofit organizations and private companies are trying to publicize the available programs.
Kilbride, whose husband Thomas is a first sergeant in the Marine Corps reserves, took advantage of the Soldiers and Sailors Civil Relief Act of 1940. As outlined on the Department of Defense Web site, www.defenselink.mil, its intent is to help service members who are hurt by the cut in pay they often take in moving from civilian jobs to military posts.
Among its key financial provisions:
A 6 percent cap on interest charged on credit cards, mortgages, car loans and other personal debts.
Protection from eviction if monthly rent does not exceed $1,200 a month.
Delay of civil court actions, including bankruptcy and divorce proceedings.
James Nutter Jr., president and chief executive of James B. Nutter Co., a mortgage banker in Kansas City, Mo., said his company responded quickly to Kilbride's request for a lower interest rate.
By his calculation, a family that gets the rate on a $125,000 mortgage loan reduced to 6 percent from 7.5 percent saves $125 a month. The lender absorbs the cost, he added.
I don't think enough people know about this, and they should,'' Nutter said. We need to give our service people as much help as possible.''
Taxes are another area where active duty military personnel and their families can get a break, especially when they're serving in a designated combat zone.
The Internal Revenue Service just this month put up a special section on its Web site at www.irs.gov detailing armed forces tax benefits.
Under IRS rules, enlisted men and women can exclude all the military pay they earn while in a combat zone from U.S. taxes. The exclusion for officers is capped at $5,882 a month. They also have an automatic extension of the deadline for filing federal income taxes to 180 days after they leave a combat area.
Mark Luscombe, an analyst at CCH Inc. in Riverwoods, Ill., which provides tax information and services, said some lower-income military families may find it advantageous to take a second look at last year's taxes and consider filing an amended 1040 form.
That's because combat pay and allowances were excluded from the definition of earned income'' with little fanfare starting in the 2002 tax year. As a result, more military families may qualify for the earned income tax credit for 2002 and 2003.
Those who die in Iraq, who make the ultimate sacrifice for their country, also get tax breaks,'' Luscombe said.
Taxes are forgiven for any year during which the deceased serviceman or servicewoman was in a combat zone, and military insurance basically a group term policy known as Servicemen's Group Life Insurance is exempt from taxation. Service members are automatically insured for $250,000 under SGLI, but can reduce or decline coverage.
The families of troops who are killed currently must pay taxes on half of their $6,000 survivors' benefit, but legislation has been introduced in Congress to make that tax-free, too, he noted.
To help with debts, some institutions will waive student loan repayments while reservists and National Guard members are on active duty, generally on a case-by-case basis.
A number of Web sites have sprung up to help military personnel and their families weigh their financial options.
One is operated by the National Military Family Association formerly the National Military Wives Association which has links from its site at www.nmfa.org to scores of helpful government and volunteer organizations.
The Bond Market Association recently developed Ways to Prepare when Your Spouse is Deployed'' for its educational Web site www.tomorrowsmoney.org.
It's part of our goal to help groups we felt were underserved, especially women, young people and the Hispanic community,'' said Micah Green, president of the association. Military personnel, he said, need some basic information ... and the site is designed to link them to where they can follow through.''
The Financial Planning Association offers assistance, including a free online question-and-answer service, to members of the military and their families at www.fpanet.org. The University of Maryland University College, which specializes in adult education and has many military participants, is using a grant from Household International to set up a financial management site that should be operational next month. The university's site is www.umuc.edu.
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