H.R. 2565 (119th)Bill Overview

No Tax on Bonuses Act of 2025

Taxation|Taxation
Cosponsors
Support
Republican
Introduced
Apr 1, 2025
Discussions
Bill Text
Current stageCommittee

Referred to the House Committee on Ways and Means.

Introduced
Committee
Floor
President
Law
Congressional Activities
01 · The brief
Plain-English summaryWhat this bill actually does

This bill amends the Internal Revenue Code to exclude certain enlistment, reenlistment, accession, retention, incentive, and other bonuses paid to members of the U.S. Armed Forces from gross income. Conforming amendments to related Code sections are included.

Why people may split

Fiscal concern: centrists and left want CBO score; conservatives prioritize benefit.

Watch point

Relative to its intended legislative type, this bill is a concise and targeted statutory amendment that clearly adds a specified exclusion to gross income for certain military bonuses and includes conforming amendments and an effective date.

This bill amends the Internal Revenue Code to exclude certain enlistment, reenlistment, accession, retention, incentive, and other bonuses paid to members of the U.S. Armed Forces from gross income.

Conforming amendments to related Code sections are included.

The exclusion applies to taxable years beginning after the Act's enactment.

Passage55/100

Narrow, popular change with straightforward implementation increases prospects, but uncapped revenue loss and lack of offsets reduce standalone passage odds.

CredibilityPartially aligned

Relative to its intended legislative type, this bill is a concise and targeted statutory amendment that clearly adds a specified exclusion to gross income for certain military bonuses and includes conforming amendments and an effective date. It lacks explanatory findings, fiscal acknowledgment, and treatment of some operational edge cases.

Contention22/100

Fiscal concern: centrists and left want CBO score; conservatives prioritize benefit.

02 · What it does

Who stands to gain, and who may push back.

Likely benefits vs burdens50% / 50%
Federal agenciesFederal agencies

These are examples from the analysis, not a ranked list of the most-affected groups.

Likely helped
  • Federal agenciesIncreases take-home pay for service members receiving qualified bonuses by eliminating federal income tax on those paym…
  • Potential benefitStrengthens recruitment and retention incentives by making bonuses more financially attractive to prospective and curre…
  • Potential benefitReduces payroll withholding complexity and potential refund claims related to bonus taxation for military pay administr…
Likely burdened
  • Federal agenciesReduces federal income tax revenues by exempting a class of compensation, increasing budgetary costs.
  • Federal agenciesCreates potential state revenue losses if states conform their tax bases to the federal exclusion.
  • Potential burdenMay encourage structuring compensation toward bonuses to achieve tax advantages, altering DoD compensation design.
03 · Why people split

Why the argument around this bill splits.

Fiscal concern: centrists and left want CBO score; conservatives prioritize benefit.
Progressive80%

Likely supportive as a targeted benefit for service members that increases take-home pay.

May seek assurances on equity and fiscal tradeoffs, but views direct support to military personnel favorably.

Leans supportive
Centrist70%

Generally favorable as a modest, targeted benefit for military members, but wants clarity on budgetary cost and implementation details.

Will weigh recruitment benefits against fiscal discipline.

Leans supportive
Conservative95%

Strongly supportive as a pro-military, tax-relief measure that increases compensation for service members.

Sees it as a limited, commonsense step to aid recruitment and reward service.

Leans supportive
04 · Can it pass?

The path through Congress.

Introduced

Reached or meaningfully advanced

Committee

Reached or meaningfully advanced

Floor

Still ahead

President

Still ahead

Law

Still ahead

Passage likelihood55/100

Narrow, popular change with straightforward implementation increases prospects, but uncapped revenue loss and lack of offsets reduce standalone passage odds.

Scope and complexity
24%
Scopenarrow
24%
Complexitylow
Why this could stall
  • Estimated revenue loss absent from bill text
  • Whether congressional budget rules would demand offsets
05 · Recent votes

Recent votes on the bill.

No vote history yet

The bill has not accumulated any surfaced votes yet.

06 · Go deeper

Go deeper than the headline read.

Included on this page

Fiscal concern: centrists and left want CBO score; conservatives prioritize benefit.

Narrow, popular change with straightforward implementation increases prospects, but uncapped revenue loss and lack of offsets reduce standa…

Unlocked analysis

Relative to its intended legislative type, this bill is a concise and targeted statutory amendment that clearly adds a specified exclusion to gross income for certain military bonuses and includes conforming amendments…

Go beyond the headline summary with full stakeholder mapping, legislative design analysis, passage barriers, and lens-by-lens tradeoff breakdowns.

Perspective breakdownsPassage barriersLegislative design reviewStakeholder impact map
Open full analysis