FAMILYVA program

HEART Act Tax Relief for Survivors

Under the Heroes Earnings Assistance and Relief Tax Act of 2008, survivors may move the military death gratuity and SGLI insurance proceeds into a Roth IRA or Coverdell education savings account without the normal contribution limits, keeping those funds in tax-advantaged accounts. The rollover must be completed within 12 months of receiving the payment.

Available to recipients of the death gratuity or SGLI proceeds; 12-month rollover window

View on VA.gov

Step-by-step guide

What you get

A limited window to put all or part of a military death gratuity or SGLI payment into a Roth IRA or a Coverdell education savings account without the usual yearly contribution limits, within 1 year of receiving it.

What the IRS rule looks for

A military death gratuity or SGLI paymentIRS Publication 590-A covers a death gratuity or SGLI payment for a death from injury that occurred after October 6, 2001. IRS Notice 2010-15 says that for an injury before June 17, 2008, the contribution had to be made by June 17, 2009.
Within 1 year of receiving itThe rollover must be completed before the end of the 1-year period that starts on the date you received the payment. Military OneSource puts it as 12 months.
A Roth IRA or Coverdell ESAYou use a private financial institution and need to have or open a Roth IRA or a Coverdell ESA. A Coverdell ESA is an education savings account; Publication 970 has its rules. The total you roll over cannot be more than you received, less any part already put into another Roth IRA or Coverdell ESA.

Source: IRS Publication 590-A (2025) (opens in new tab); IRS Notice 2010-15 (Internal Revenue Bulletin 2010-6) (opens in new tab); Military OneSource: the HEART Act (opens in new tab); IRS Publication 970 (2025) (opens in new tab)

What to gather, and what it shows VA

Documents for this benefit: what each is, what it shows VA, and how VA gets it
Document	What it shows	How VA gets it	Have it?
Death gratuity payment record Your record of the military death gratuity paid to you.	The amount you received and the date your 1 year started	Keep it with your tax records.	Yes
SGLI payment record Your record of the Servicemembers' Group Life Insurance payment made to you.	The amount you received and the date your 1 year started	Keep it with your tax records.	Yes
Roth IRA or Coverdell ESA account An account at a private financial institution that will hold the rollover.	Where the rollover goes	Open one at a financial institution of your choice if you do not have one.	Yes

Keep these with your tax records and take them to your financial institution. BeneVets does not ask for them.

Steps, in order

Free help with VA survivor benefits
The rollover is a tax rule handled with your financial institution, not a VA claim. If you also apply for VA survivor benefits, that is a VA claim. Free help: an accredited VSO can file this with you. Find one near you in the BeneVets VSO directory at Find an accredited VSO near you.
Source: VA.gov: accredited representatives (opens in new tab)
Note the date you received each payment
Your 1 year window starts on the date you received the death gratuity or the SGLI payment. Each payment has its own date.
Source: IRS Publication 590-A (2025) (opens in new tab); IRS Publication 970 (2025) (opens in new tab)
Get free financial counseling first
If you received an SGLI payment, VA's Beneficiary Financial Counseling Service gives 40 hours of free financial counseling through FinancialPoint, plus online resources, for up to 2 years after VA pays the claim. Military OneSource financial counselors are at 800-342-9647 or live chat.
Source: VA.gov: financial counseling and online will preparation (opens in new tab); VA Life Insurance: Beneficiary Financial Counseling Service (opens in new tab); Military OneSource: the HEART Act (opens in new tab)
Choose or open the account
Use a private financial institution and have or open a Roth IRA or a Coverdell ESA.
Source: Military OneSource: the HEART Act (opens in new tab)
If you roll over, the deadline
If you choose to roll over, put in all or part of what you received before the 1 year period ends. Across your Roth IRAs and Coverdell ESAs, the total cannot be more than you received.
Source: IRS Publication 590-A (2025) (opens in new tab); IRS Publication 970 (2025) (opens in new tab); IRS Notice 2010-15 (Internal Revenue Bulletin 2010-6) (opens in new tab)

Good to know

The payments themselves

The IRS says a death gratuity paid to a survivor is left out of the survivor's gross income, and life insurance proceeds are in general left out too.

Source: IRS Publication 3 (2025), Armed Forces' Tax Guide (opens in new tab); IRS Notice 2010-15 (Internal Revenue Bulletin 2010-6) (opens in new tab)

Taking the money out later

The amount rolled into a Roth IRA counts as your basis, which is not taxed when it is paid out. Military OneSource says the first contribution can be taken out of a Roth IRA at any time with no penalty.

Source: IRS Publication 590-A (2025) (opens in new tab); Military OneSource: the HEART Act (opens in new tab)

Free counseling before you decide

Military OneSource tells survivors to use VA's Beneficiary Financial Counseling Service, or Military OneSource financial counselors at 800-342-9647 or live chat, to learn how to use the HEART Act before the window closes. BFCS opens only after VA pays an SGLI, FSGLI, VGLI, or TSGLI claim.

Source: Military OneSource: the HEART Act (opens in new tab); VA.gov: financial counseling and online will preparation (opens in new tab)