To amend the Internal Revenue Code of 1986 to permanently extend the election to include combat pay as earned income for purposes of the earned income tax credit and penalty-free distributions from retirement plans to individuals called to active duty, and for other purposes.

Amends the Internal Revenue Code to make permanent: (1) the taxpayer election to include combat zone compensation as earned income for purposes of the earned income tax credit; and (2) the exemption from penalties for premature distributions from retirement plans to individuals called or ordered to active military duty.

Amends title XVI (Supplemental Security Income for the Aged, Blind, and Disabled) of the Social Security Act to exclude from supplement security income benefit determinations any state annuity paid to a blind veteran.