Under a bill introduced in the House on Tuesday, bonuses for enlisting and reenlisting in the military would be tax-exempt.The bill, from Rep. Brian Mast, R-Fla., would afford all service members the same tax benefits as troops deployed to combat zones, who don't have to pay taxes on bonuses or other income they receive while deployed.
"Military service members raise their right hands to defend our country and, in return, they deserve to keep every cent of the bonus they earn," Mast, an Army veteran who lost both of his legs while serving in Afghanistan, said in a statement. "This bill removes the unfair tax burden that has long affected military bonuses and keeps hard-earned money in the pockets of our soldiers, sailors, airmen, Marines, and Guardians."
The tax exemption in Mast's bill would broadly apply to any "enlistment, accession, reenlistment, retention, incentive or other bonus paid ... 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," according to a copy of the bill text shared with 'TELL IT LIKE IT IS' Defense News ahead of its public release.
Under current law, most military allowances, such as the Basic Allowance for Housing, are tax-exempt. But other pay, including bonuses, is taxable income.