To amend the Internal Revenue Code of 1986 to exclude from gross income the earnings from certain overseas deployments of members of the Armed Forces.
Summary
H.R. 6970 aims to amend the Internal Revenue Code of 1986, specifically Section 112, to exclude earnings from certain overseas deployments of members of the Armed Forces from their gross income. This exclusion would apply to enlisted personnel and commissioned officers serving overseas, expanding the existing combat zone tax exclusion. The bill defines 'overseas' as any area outside the United States, but excludes service pursuant to permanent change of station orders.
Expected Effects
If enacted, H.R. 6970 would reduce the tax burden on military personnel deployed overseas, potentially increasing their disposable income. This could serve as an incentive for military service and improve the financial well-being of service members and their families. The change would apply to taxable years beginning after December 31, 2025.
Potential Benefits
- Increased disposable income: Service members deployed overseas would have more of their earnings available.
- Financial relief: Reduced tax burden can ease financial strain on military families.
- Incentive for service: The tax exclusion may encourage enlistment and retention in the Armed Forces.
- Recognition of service: Acknowledges the sacrifices made by those serving overseas.
- Simplified tax filing: Makes tax filing easier for deployed service members.
Most Benefited Areas:
Potential Disadvantages
- Reduced government revenue: The tax exclusion would decrease federal tax revenue.
- Potential for abuse: Defining 'overseas' might lead to loopholes or unintended beneficiaries.
- Complexity in implementation: Determining eligibility could create administrative challenges.
- Fairness concerns: May create disparity between those deployed overseas and those stationed within the US.
- Economic impact: The reduction in tax revenue could impact other government programs.
Most Disadvantaged Areas:
Constitutional Alignment
This bill aligns with the constitutional power of Congress to lay and collect taxes, as outlined in Article I, Section 8, Clause 1. It also relates to the power to provide for the common defense (Article I, Section 8, Clause 12) by potentially incentivizing military service. The bill does not appear to infringe upon any specific constitutional rights or limitations.
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).