This plan would stop the federal government from taxing military bonuses. If you serve in the U.S. military and get a bonus—like for enlisting, re-enlisting, special skills, or staying in longer—that bonus would not count as taxable income on your federal taxes. This means more of that money stays in your pocket instead of going to the IRS .

It would start with tax years that begin after December 31, 2024. So bonuses paid for 2025 and later would be tax-free for federal income tax purposes .

• Who is affected: Service members who receive military bonuses.
• What changes: Military bonuses are excluded from federal taxable income.
• When it starts: Applies to tax years beginning after December 31, 2024 .