HR2565119th CongressWALLET

No Tax on Bonuses Act of 2025

Sponsored By: Representative Rep. Mast, Brian J. [R-FL-21]

Introduced

Summary

Excludes certain military enlistment and retention bonuses from taxable income. The No Tax on Bonuses Act of 2025 would create a new exclusion for “qualified bonuses” paid by the Secretary concerned to members of the Armed Forces for enlistment, accession, reenlistment, retention, commissioning, or entering a reserve affiliation agreement. The bill adds a new subsection to section 112 of the Internal Revenue Code and makes conforming edits to sections 3401, 2201, and the Part III table so these bonuses are treated as non‑taxable for taxable years beginning after enactment.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

No federal tax on qualifying military bonuses

This bill would exclude certain military bonuses from federal income tax. It would cover enlistment, accession, reenlistment, retention, incentive, and similar bonuses. The bonus must be paid by the Secretary concerned and tied to an agreement to serve, reenlist, extend service, accept a commission, or join the reserves. If passed, this could raise take-home pay for affected service members. The change would apply for tax years beginning after the date of enactment.

Small change to payroll withholding rules

This bill would tweak wording that defines compensation for federal income tax withholding. Payroll offices could change how they withhold on some payments, including some military bonuses. This would mainly affect timing of withheld tax, not total tax owed for most people. The change would apply for tax years beginning after the date of enactment.

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Sponsors & CoSponsors

Sponsor

Rep. Mast, Brian J. [R-FL-21]

FL • R

Cosponsors

  • Rep. Hamadeh, Abraham J. [R-AZ-8]

    AZ • R

    Sponsored 6/26/2025

  • Rep. Patronis, Jimmy [R-FL-1]

    FL • R

    Sponsored 7/21/2025

  • Del. King-Hinds, Kimberlyn [R-MP-At Large]

    MP • R

    Sponsored 3/18/2026

Roll Call Votes

No roll call votes available for this bill.

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