Military bonuses get tax-free status under new bill
H.R. 3515 — To amend the Internal Revenue Code of 1986 to exclude military bonuses from gross income. · Filed by Jennifer Kiggans (R-VA) · 2 cosponsors · Introduced May 20, 2025 · Referred to committee
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What it does
This bill amends the tax code to exclude military bonuses from taxable income. Currently, military members must pay federal income tax on bonuses; this bill makes those bonuses tax-free, similar to other qualified military benefits already excluded from taxation. The change applies retroactively to 2025 and later tax years.
Why we flagged it
The bill's sole operative mechanism is a targeted tax exclusion for military bonuses. It is a straightforward tax benefit for a defined group (uniformed services members) with no riders, no hidden provisions, and no private-sector carve-outs.
What the text implies
- The retroactive effective date (Jan. 1, 2025) means servicemembers may claim refunds on 2025 tax returns for bonuses already received and taxed, creating a one-time revenue cost to the Treasury.
- The bill references 37 U.S.C. ch. 5 without restating its scope; the actual bonus types covered depend on what that statute defines—the bill's reach is limited by that external definition.
Who stands to gain
uniformed services members (military personnel)