Summary of H.R. 3515: Excluding Military Bonuses from Gross Income

Purpose and Intent

The purpose of H.R. 3515 is to exclude military bonuses from being counted as taxable income under the Internal Revenue Code. This would provide tax relief for active-duty service members who receive bonuses as part of their military compensation.

Key Provisions

The bill proposes the following key changes:

1. Exclusion of Military Bonuses from Gross Income: The legislation would amend the Internal Revenue Code to specifically exempt military bonuses from being included in a service member's gross income for federal tax purposes.

2. Retroactive Application: The exclusion would apply retroactively to tax years beginning after December 31, 2024. This would provide refunds or credits for service members who have already paid taxes on their military bonuses.

3. Companion Bill in Senate: A companion bill, S. 1856, has been introduced in the Senate and is currently under consideration.

Affected Parties

This bill would primarily benefit active-duty personnel in the U.S. Armed Forces who receive bonuses as part of their military compensation. It is intended to provide tax relief and increase the take-home pay for service members who earn these types of supplemental payments.

Procedural and Timeline Aspects

H.R. 3515 was introduced in the House of Representatives on May 20, 2025 and has been referred to the House Committee on Ways and Means for consideration. If enacted, the bill's tax exclusion provisions would apply retroactively to the 2025 tax year and all subsequent years.