Congress moves to exempt military pay from federal income tax
H.R. 6189 — Service Members Tax Relief Act · Filed by Abraham Hamadeh (R-AZ) · 3 cosponsors · Introduced Nov 20, 2025 · Referred to committee
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What it does
This bill exempts active and reserve military service members from federal income tax on compensation earned during their service, effective for tax years after enactment. The exemption applies only to active service pay, not pensions or retirement income. The bill creates a new tax code section (139J) to codify this exclusion.
Why we flagged it
The bill's sole operative mechanism is a straightforward tax exclusion for active and reserve military service compensation. It is a direct, transparent tax benefit targeted at uniformed service members.
What the text implies
- The exemption applies only to active service compensation, not retirement pay, creating a potential incentive structure favoring current service over post-service income.
- No definition of 'compensation' is provided in the bill text itself; the scope depends on how the IRS interprets the term under existing IRC §139J context and Treasury guidance.
The full analysis lists 4 implications of this text.
Who stands to gain
active duty military service members; reserve component service members