This bill would make military bonuses tax-free. It changes the federal tax code so that these bonuses are not counted as part of your income on your tax return. This means service members who get a bonus would keep more of that money instead of paying federal income tax on it.

The change would start with the 2025 tax year and apply to years after that.

• Who is affected: Active-duty service members who receive military bonuses
• What changes: Military bonuses would be excluded from gross income (not taxed)
• When: For taxable years beginning after December 31, 2024 (starting with 2025 taxes)