BNA Fairness Act

This bill makes the Basic Needs Allowance (a monthly payment for lower-income military families) tax-free for federal income taxes. Right now, this allowance counts as taxable income. The bill adds it to the list of “qualified military benefits,” so families won’t owe federal tax on it. That means lower tax bills and more take‑home pay for eligible service members and their families .

It takes effect for tax years that end after the bill becomes law. It doesn’t change who can get the allowance. Today, a service member may qualify if they finished initial training, have at least one dependent, and their household income is at or below 200% of the federal poverty level, adjusted for family size and location.

• Who is affected: Active-duty service members who receive the Basic Needs Allowance and their families.
• What changes: The allowance would not be counted as taxable income, by adding it to the tax code’s list of military benefits that are excluded from gross income.
• When: Applies to tax years ending after the date the bill becomes law.