Sponsors (7)
The bill gives targeted tax relief to retired service members and law-enforcement officers serving as SROs—including a lifetime exemption after long SRO service—in exchange for reduced federal revenue and added reporting and compliance costs for local employers, while creating a narrowly tailored preferential tax benefit.
Retired service members and retired law-enforcement officers who serve as school resource officers (SROs) can exclude their retirement pay from federal taxable income while employed as SROs, and individuals who serve at least 10 years as SROs receive a lifetime exemption so that their retirement pay remains tax-free after SRO service ends.
Taxpayers and local employers gain clearer administrative rules because the bill requires Treasury to issue regulations within 180 days and establishes reporting obligations, which may improve implementation clarity and timeliness for taxpayers and schools.
All taxpayers face reduced federal revenue because excluding retirement pay for eligible SROs narrows the tax base, which could increase the deficit or shift tax burdens onto others.
Local law-enforcement agencies and school employers must report SRO start/end dates to the IRS and face penalties for failures, creating added administrative burden and potential compliance costs for local governments and agencies.
The exclusion creates a preferential tax treatment for a specific occupational group (retired service members and retired law enforcement working as SROs), narrowing the tax base in a way that may be viewed as unfair relative to other retirees.
Based on analysis of 2 sections of legislative text.
Excludes certain retirement income from federal taxable income for retired military members and retired law enforcement officers while they serve as school resource officers, and requires employer reporting to the IRS.
Introduced November 18, 2025 by Ryan Zinke · Last progress November 18, 2025
Excludes certain retirement pay from federal taxable income for people who retired from the Armed Forces or as law enforcement officers when they work as school resource officers (SROs). It also gives a lifetime exclusion for retirees who serve at least 10 years as an SRO and requires the Treasury to write implementing regulations within 180 days. Requires the employing law enforcement agency to notify the IRS when an eligible retiree begins and ends SRO employment; failure to provide the notice will trigger existing IRS penalties. The tax change applies to taxable years beginning after enactment.