Sponsor
Jefferson Van Drew
Representative · R-NJ
Representative · R-NJ
The bill gives permanent federal income tax relief and simpler budgeting to active-duty servicemembers in exchange for reduced federal revenue and a delayed start date for the benefit, balancing support for military families against a fiscal cost and a timing trade-off.
Active-duty servicemembers and their households will be able to permanently exclude military pay from federal gross income after the bill's effective date, lowering federal income tax liability and simplifying after-tax budgeting.
Federal revenue will decrease because military pay is excluded from taxable income, which could force spending cuts, require offsets, or increase deficits unless the loss is made up elsewhere.
Servicemembers will not receive the tax exclusion immediately—the benefit is delayed until after the second October 1 following enactment—denying near-term relief to those who may need it now.
Based on analysis of 2 sections of legislative text.
Excludes amounts earned by active-duty members of the Armed Forces from federal gross income under a new IRC section 139J.
Official title: To amend the Internal Revenue Code of 1986 to exempt servicemembers from the income tax.
Introduced January 28, 2025 by Jefferson Van Drew · Last progress January 28, 2025
Excludes pay earned by active-duty members of the U.S. Armed Forces from federal gross income, creating a new Internal Revenue Code section 139J. The exclusion applies to income earned after the second October 1 following enactment, effectively providing a targeted tax exemption for active-duty servicemembers. The bill adds the new code provision and updates the table of sections; it contains no other programmatic changes, funding, or deadlines beyond the effective-date timing rule.