Bill Summary
The proposed legislation aims to amend the Internal Revenue Code of 1986 by excluding military bonuses from being counted as gross income for tax purposes. Specifically, it modifies section 134 of the code to ensure that bonuses paid to members of the uniformed services, as outlined in chapter 5 of title 37 of the United States Code, are not subject to federal income tax. The changes will take effect for taxable years beginning after December 31, 2024, thereby providing a financial benefit to military personnel by reducing their taxable income.
Possible Impacts
Here are three examples of how the proposed legislation to exclude military bonuses from gross income could affect people:
1. **Increased Disposable Income for Service Members**: By excluding military bonuses from gross income, service members would have a lower total taxable income. This means they would pay less in federal taxes, resulting in increased disposable income. For example, a soldier who receives a $5,000 bonus would not have to report this amount as taxable income, allowing them to keep the full bonus amount to spend on necessities or savings.
2. **Enhanced Financial Stability for Military Families**: The legislation could contribute to greater financial stability for military families. With the exclusion of bonuses from taxable income, families may find it easier to manage their budgets, afford housing, or invest in education. This financial relief could lead to improved quality of life and reduced stress related to financial pressures.
3. **Potential Impact on Military Recruitment and Retention**: The amendment may enhance the attractiveness of military service as a career option. By allowing service members to retain more of their earned bonuses, it could serve as an incentive for both recruitment and retention, as potential recruits and current members may view the military as a more financially rewarding career. This could ultimately impact the overall effectiveness and readiness of the armed forces.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3515 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 3515
To amend the Internal Revenue Code of 1986 to exclude military bonuses
from gross income.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 20, 2025
Mrs. Kiggans of Virginia (for herself and Mr. Bishop) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to exclude military bonuses
from gross income.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EXCLUSION OF MILITARY BONUSES.
(a) In General.--Subsection (a) of section 134 of the Internal
Revenue Code of 1986 is amended by striking ``any qualified military
benefit'' and inserting ``any bonus paid to a member of the uniformed
services under chapter 5 of title 37, United States Code, or any
qualified military benefit''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2024.
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