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119-s-1108119th Congress

Tax Cuts for Veterans Act of 2025

Sponsored By: Senator Ricketts, Pete [R-NE]

Introduced

Summary

Excludes most military retirement and related pay from federal taxable income. This bill would make retired and retainer pay and many disability or combat-related pensions non-taxable for federal income tax purposes while creating a separate rule for certain uniformed services pay reductions.

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  • Veterans and military retirees: Retired and retainer pay paid under titles 10 or 14 would be excluded from gross income, and monthly compensation, pensions, annuities, or allowances tied to disability or combat-related injury or death paid under titles 10, 14, 37, or 38 would also be excluded.
  • Members or former members of non-armed uniformed services: A Reduced Uniformed Services Retirement Pay regime would exclude the amount of any reduction in retired or retainer pay under chapter 73 of title 10. A special rule limits exclusions until an amount equal to an individual's “consideration for the contract” is excluded. That term covers two parts: reductions before January 1, 1966 and deposits made under sections 1438 or 1452(d) of title 10.
  • Tax rules and timing: The bill makes conforming changes to title 10 and the Internal Revenue Code and would apply to taxable years beginning after enactment.

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Bill Overview

No Economic Impacts Identified for this Bill

Sponsors & CoSponsors

Sponsor

Ricketts, Pete [R-NE]

NE • R

Cosponsors

  • Sen. Rosen, Jacky [D-NV]

    NV • D

    Sponsored 3/25/2025

  • Sen. Gallego, Ruben [D-AZ]

    AZ • D

    Sponsored 3/26/2025

Roll Call Votes

No roll call votes available for this bill.

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