To amend the Internal Revenue Code of 1986 to exclude military bonuses from gross income.

Summary

Expands the federal tax exclusion for qualified military benefits to explicitly cover bonuses paid to members of the uniformed services under chapter 5 of title 37 (such as enlistment, re‑enlistment, and certain retention bonuses). The change applies to taxable years beginning after December 31, 2024, so affected service members will not include those chapter 5 bonuses in gross income for tax purposes starting in 2025. This is a targeted, straightforward change to the tax code that reduces taxable income for eligible uniformed service members who receive chapter 5 bonuses and may modestly reduce federal income tax receipts.

• Adds chapter 5 (title 37) bonuses for uniformed service members to the existing gross‑income exclusion for qualified military benefits.
• Applies to taxable years beginning after December 31, 2024, so the change takes effect for the 2025 tax year.
• Reduces taxable income for eligible service members who receive enlistment, re‑enlistment, and certain retention bonuses.
• Likely produces a modest reduction in federal income tax receipts; does not appropriate new spending.
• Requires payroll, finance offices, and the IRS to update withholding and reporting practices for affected bonuses.
• Is narrowly targeted to military bonuses and does not change treatment of other pay or benefits.