119th (2025–2027)
H.R. 2565
The No Tax on Bonuses Act of 2025 would exempt military enlistment and reenlistment bonuses from federal income tax. The bill expands existing tax benefits for armed forces members by allowing them to exclude bonuses paid for enlisting, reenlisting, extending service commitments, or entering reserve affiliations from their gross taxable income. This change would apply to all members of the active and reserve components of the U.S. military who receive qualifying bonuses from the Department of Defense. The legislation would take effect for any bonuses received in tax years beginning after the law's enactment, and no specific funding authorization is mentioned since this is a tax exemption rather than a spending program.