Coast Guard Combat-Injured Tax Fairness Act

This bill amends the 2016 Combat-Injured Veterans Tax Fairness Act to clarify which federal agencies handle tax refunds for Coast Guard veterans with combat-related injuries. It specifically ensures that when the Coast Guard operates under the Department of Homeland Security (not the Navy), the Secretary of Homeland Security, or the Secretary of Transportation (during prior service periods), will process refunds for improperly withheld taxes on severance payments. The bill requires these agencies to identify and refund withheld amounts within one year of enactment. It directly affects Coast Guard veterans who received severance payments but had taxes withheld incorrectly due to unclear agency responsibilities. The change corrects a technical gap in the existing law, ensuring veterans receive refunds without needing to navigate complex jurisdictional rules.