H.R. 2565

119 HR 2565 IH: No Tax on Bonuses Act of 2025
 U.S. House of Representatives
 2025-04-01
 text/xml
 EN
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 I  119th CONGRESS  1st Session  H. R. 2565  IN THE HOUSE OF REPRESENTATIVES   April 1, 2025   Mr. Mast  introduced the following bill; which was referred to the  Committee on Ways and Means    A BILL
To amend the Internal Revenue Code of 1986 to exclude enlistment and reenlistment bonuses for members of the armed forces from gross income.
1.
Short title
This Act may be cited as the   No Tax on Bonuses Act of 2025  .
2.
Exclusion from gross income of enlistment and reenlistment bonuses for members of the armed forces
(a)
In general
 Section 112  of the Internal Revenue Code of 1986 is amended by redesignating subsections (c) and (d) as subsections (d) and (e), respectively, and by inserting after subsection (b) the following new subsection:
(c)
Qualified bonus
Gross income does not include a qualified bonus.
 .
(b)
Qualified bonus defined
Section 112(d) of such Code, as redesignated by subsection (a), is amended by adding at the end the following new paragraph:
(6)
Qualified bonus
(A)
In general
The term  qualified bonus  means an enlistment, accession, reenlistment, retention, incentive, or other bonus paid by the Secretary concerned to a member of the Armed Forces of the United States in exchange for the agreement of the member to accept a commission as an officer, extend an active service commitment as an officer, enlist, reenlist, or extend an enlistment as an enlisted member in an active or reserve component, or enter into a reserve affiliation agreement.
(B)
Other definitions
For purposes of subparagraph (A), the terms  active service ,  enlisted member ,  officer , and  Secretary concerned  have the meanings given to such terms in section 101 of title 10, United States Code.
 .
(c)
Conforming amendments
(1)
Section 2201 of such Code is amended by striking  section 112(c)  both places it appears and inserting  section 112(d) .
(2)
The heading for section 112 of such Code is amended by inserting
and other   before
compensation  .
(3)
Section 3401(a)(1) of such Code is amended by inserting  and other  before  compensation .
(4)
The table of sections for part III of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 112 and inserting the following new item:
Sec. 112. Certain combat zone and other compensation of members of the Armed Forces.
  .
(d)
Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.