The Medal of Honor is America’s highest Military award. Those who receive it did so at risk of life and have gone above and beyond the call of duty. This obviously makes the award an extremely rare one. There is a reason why since its origination in the 1860ies only about 3,500 have been awarded.
Two news pieces on the Medal of Honor in the last months have highlighted how extreme the circumstances are under which the Medal of Honor is awarded. U.S. Army Staff Sgt. Michael Ollis will receive the medal posthumously for shielding a fellow NATO soldier from a suicide bomber in 2013 (www.stripes.com/branches/army/2026-02-04/medal-of-honor-michael-ollis-20621257.html). Royce Williams, a 100 years old Navy fighter veteran from the Korean War will receive the medal for shooting down 4 MiGs in a 1 vs. 7 dog fight in 1952 (www.stripes.com/veterans/2026-02-05/royce-williams-dogfight-russians-medal-of-honor-20637092.html).
It is only befitting that any Medal of Honor recipient is eligible for a special pension. This special pension – after it had for some time meandered around $1,500 per month – by way of the 2025 Monetary Enhancement for Distinguished Active Legends (MEDAL) Act has finally been raised to $5,625 per month. The pension is by no means compensation for acts of bravery or time in service. But it acknowledges the public role the Medal of Honor brings as usually, any recipient of the Medal of Honor will spend countless hours and travel thousands of miles on his own time and dime to share his story of service, sacrifice and bravery with schoolchildren, volunteer organizations or Military units. It is this display of exemplary role modelling which cannot be commanded but which the special pension recognizes.
What does this have to do with Germany one wonders – there are not too many recipients alive and none apparently calls Germany home. Yes, but the examples above show that the medal sometimes comes with quite a delay and (former) members of the US Military tend to be fairly mobile individuals. Somebody might find himself very well a recipient after he relocated to Germany. It is even possible that the special pension transfers to a surviving spouse who is living in or has moved to Germany.
Any regular US Military pension cannot be touched by Germany regardless, but is regularly used to apply a higher tax rate to the income which is taxable in Germany. However, at taxpatation we are convinced that this special pension does not even meet the criterion of income under German tax law – it is hence to be completely disregarded for any tax effect.
We understand that the Medal of Honor pension is not a regular occurrence, but we can promise that its proper (non-)tax treatment is a fight we are happy to take on and that we are feeling pretty confident about it!
