Hostage Relief Act of 1980

Hostage Relief Act of 1980 - Title I: Amendments to Title 5 of the United States Code - Amends title 5 of the United States Code to direct the Secretary of the Treasury to establish a savings fund to which the head of an agency may allot all or a portion of the pay and allowances of any employee who is in a missing status on or after November 4, 1979, as the result of a hostile action against the United States. Requires interest on such fund to be compounded quarterly at the average rate paid on United States Treasury bills with three-month maturities issued during the calendar quarter immediately preceding the first day of the applicable pay period.

Directs the President to issue regulations to authorize agency heads to reimburse for up to $25,000 in any calendar year any such employee, or dependent of such an employee, for necessary travel, rest and recuperation, private medical care, and other expenses related to the ordeal which are incurred on or after such date. Entitles the spouse of such an employee to reimbursement, for a certain time, for expenses incurred for tuition, books, fees, and subsistence while attending an educational or training institution.

Extends to such employees the provisions of the Soldiers' and Sailors' Civil Relief Act of 1940, deferring civil actions that affect property rights of such persons until their missing status is ended.

Applies the provisions of this title to all citizens and resident aliens of the United States held hostage in Teheran at any time during November, 1979, and to their dependents and spouses, regardless of whether they are Federal employees.

Title II: Amendments to the Internal Revenue Code of 1954 - Amends the Internal Revenue Code to exclude from the gross income of such an employee compensation received for active service for any month during the period of his or her missing status, or during which such employee was hospitalized as a result of wounds, injury, disease, or partial or total physical or mental disablement incurred during a hostile action against the United States. Cancels the income taxes for any such employee who dies as a result of such hostile action, for the year in which death occurs and for all prior years during which the employee was in missing status.

Authorizes spouses of such employees to file a joint income tax return.

Defers the filing of an income tax return by such an employee until after 180 days following the termination of his or her missing status.

Applies the provisions of this title to all citizens and resident aliens of the United States held hostage in Teheran at any time during November, 1979, regardless of whether they are Federal employees. Applies the tax exclusion to non-employees only to the extent of the daily equivalent of the annual basic rate of pay in effect for level V of the Executive Schedule.