No Tax on Bonuses Act of 2025

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2565 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 2565

 To amend the Internal Revenue Code of 1986 to exclude enlistment and 
reenlistment bonuses for members of the armed forces from gross income.


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                    IN THE HOUSE OF REPRESENTATIVES

                             April 1, 2025

   Mr. Mast introduced the following bill; which was referred to the 
                      Committee on Ways and Means

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                                 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Tax on Bonuses Act of 2025''.

SEC. 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.
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