Army Lt. Col. Erin Fritzler, commander of the Los Angeles Recruiting Battalion, and recruits participate in the Torrance Armed Forces Day Parade in Torrance, Calif., on May 17, 2025. Proposed legislation, dubbed the BONUS Act, would make bonuses earned by service members for enlisting, reenlisting or excelling in their duties exempt from federal taxes. (Brea DuBose/U.S. Army)
WASHINGTON — Military bonuses earned by service members for enlisting, reenlisting or excelling in their duties would be exempt from federal taxes under a new bill introduced in the House and Senate.
The legislation, dubbed the BONUS Act, would ensure that service members receive 100% of their earned bonuses without penalty, according to its co-sponsors Reps. Jen Kiggans, R-Va., and Sanford Bishop, D-Ga.
“The heroes who swear an oath to defend our way of life should not be punished at tax time for the bonuses they use to clothe, feed, and educate their spouses and children,” Kiggans said in a statement.
While service members deployed to combat zones are exempt from income taxes, other troops are subject to the federal income tax and are shortchanged when their bonuses are also taxed, lawmakers argue.
“The BONUS Act is a show of respect for the sacrifices they make on behalf of all Americans,” said Bishop.
Sen. Richard Blumenthal, D-Conn., is spearheading the same measure in the Senate and a similar bill was introduced by Rep. Brian Mast, R-Fla., in April.
Mast said his bill, which would exempt enlistment, reenlistment, retention and other incentive bonuses from taxation, removes “the unfair tax burden that has long affected military bonuses.”
Lawmakers in recent years have searched for ways to increase compensation for service members amid rising living costs and most recently approved a historic pay raise for junior enlisted troops.
Kiggans and Bishop said their bill is a response to long-standing concerns raised by service members, families and advocates who believe military bonuses earned in service to the country should not be taxed.
If approved, the measure would affect bonuses paid on or after January 1, 2025.
