HR6120-119

What This Bill Does

The SROS Act creates a new Internal Revenue Code section 139M excluding certain retirement income from gross income for qualifying school resource officers. The exclusion applies to individuals who retired from the Armed Forces or from law enforcement officer employment, are employed as school resource officers after clearing required background checks, and comply with State peace officer standards and training requirements. Covered retirement income includes pension, annuity, retirement income account, defined contribution plan, or defined benefit plan payments tied to the prior military or law enforcement employment. For a qualifying individual currently working as a school resource officer, retirement income received during the employed period is excluded from gross income. If the individual has worked as a school resource officer for at least 10 years, retirement income remains excluded after that employment ends. Treasury must issue regulations or guidance within 180 days. The bill also creates a notice requirement for law enforcement agencies employing qualifying school resource officers to tell Treasury the initial and ending dates of school-resource-officer employment, with information-return penalty rules applying to missed notices.

Who Benefits and How

Retired service members working as school resource officers benefit from tax-free treatment of qualifying military retirement income during covered employment. Retired law enforcement officers working as school resource officers benefit from tax-free treatment of qualifying law enforcement retirement income. Long-serving school resource officers benefit because after 10 years of service the retirement-income exclusion continues after they leave the SRO job. School districts and law enforcement agencies benefit from a tax incentive that may improve recruitment of experienced SROs. Students and schools benefit indirectly if the tax incentive increases retention of trained school resource officers.

Who Bears the Burden and How

Treasury and IRS staff must issue regulations or guidance within 180 days and administer the new exclusion. Law enforcement agencies employing qualifying SROs must file notices with Treasury on start and end dates of employment. Agencies that miss required notices may face information-return penalty rules. Federal tax revenues lose receipts from excluded retirement income. Tax return preparers must verify prior service, background-check, POST-compliance, and 10-year service conditions.

Key Provisions

• Excludes qualifying military or law enforcement retirement income while a retired individual works as a school resource officer.
• Requires qualifying SROs to clear background checks and comply with State peace officer standards and training rules.
• Extends the exclusion after school-resource-officer employment ends for individuals with at least 10 years of SRO service.
• Requires Treasury guidance within 180 days.
• Requires law enforcement agencies to notify Treasury of SRO employment start and end dates.