H.R.3515 - To amend the Internal Revenue Code of 1986 to exclude military bonuses from gross income. (119th Congress)
Summary
H.R.3515 proposes an amendment to the Internal Revenue Code of 1986, specifically targeting the exclusion of military bonuses from gross income. This bill aims to modify section 134(a) of the code to ensure that bonuses paid to members of the uniformed services under chapter 5 of title 37, United States Code, are not subject to taxation. The amendment would apply to taxable years beginning after December 31, 2024.
The bill was introduced in the House of Representatives on May 20, 2025, by Mrs. Kiggans of Virginia, with Mr. Bishop as a co-sponsor, and was referred to the Committee on Ways and Means. The intention is to provide financial relief to military personnel by exempting their bonuses from federal income tax.
This could potentially increase the attractiveness of military service and provide additional financial support to those who serve.
Expected Effects
If enacted, H.R.3515 would change the tax code to exclude military bonuses from gross income. This would directly reduce the tax burden on military personnel receiving bonuses.
The change would likely result in a decrease in federal tax revenue, requiring adjustments in budget allocations or revenue sources. The exclusion could also serve as an incentive for military service and retention.
It could also set a precedent for other types of income to be excluded from taxation.
Potential Benefits
- Increased Financial Well-being for Military Personnel: Military members would retain a larger portion of their bonus income, improving their financial stability.
- Enhanced Attractiveness of Military Service: The tax exemption could serve as an incentive for recruitment and retention of qualified individuals.
- Recognition of Service: The exclusion acknowledges the sacrifices and contributions of military personnel.
- Simplified Tax Filing: Military members would no longer need to calculate and pay taxes on their bonus income.
- Potential Boost to Local Economies: Increased disposable income for military families could stimulate local spending.
Most Benefited Areas:
Potential Disadvantages
- Reduced Federal Tax Revenue: Excluding military bonuses from gross income would decrease the amount of tax revenue collected by the federal government.
- Potential for Budgetary Adjustments: The revenue loss might necessitate cuts in other government programs or increases in other taxes to offset the impact.
- Complexity in Tax Code: While simplifying for military personnel, it adds another layer of specific exemptions to the tax code, potentially increasing overall complexity.
- Equity Concerns: Other professions or groups might argue for similar tax exemptions, leading to further erosion of the tax base.
- Potential for Abuse: Clear definitions and oversight would be needed to prevent misuse or misclassification of income as military bonuses.
Most Disadvantaged Areas:
Constitutional Alignment
This bill appears to align with the constitutional principle of providing for the common defense, as it seeks to support and incentivize military service. While the Constitution does not explicitly address tax exemptions for specific groups, Article I, Section 8 grants Congress the power to lay and collect taxes, as well as to raise and support armies.
The bill does not appear to infringe upon any specific constitutional rights or freedoms. The power to tax and spend for the general welfare is a broad power granted to Congress, and this bill falls within that scope.
However, the principle of equal protection under the law (though primarily applied through the 14th Amendment, which restricts states) could be invoked if the tax exemption is perceived as unfairly benefiting one group over others without sufficient justification.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).