Hostage Indemnification Act

Hostage Indemnification Act - Requires any individual who was taken hostage during the seizure of the U.S. embassy in Iran and any family member of such individual to be paid for medical and health care expenses not covered by insurance for three years. Compensates each hostage for personal property lost during captivity.

Credits each hostage who is a Foreign Service officer or member of the Armed Forces with additional retirement benefits for each day spent in captivity. Authorizes the President to promote each such hostage. Makes each such hostage eligible for early retirement.

Deems military personnel who were hostages to have been missing for purposes of determining the amount of leave accumulated during captivity. Entitles such personnel to 15 days of leave.

Deems any military personnel who died in Iran during the aborted rescue mission to have died of a service-connected disability for purposes of determining survivors' and dependents' educational benefits.

Directs the President to pay a specified amount in lieu of any claims against Iran to each hostage. Excludes such payment from gross income for Federal tax purposes and from State and local taxation. Makes specified tax provisions applicable to such hostages.

Expresses the sense of Congress that any hostage should be permitted to select among available service assignments according to such hostage's preference.

Commends the former hostages for their display of courage, fortitude, and dignity during their captivity.