H.R.2565

Exempts enlistment and reenlistment bonuses for members of the armed forces from gross income.

The No Tax on Bonuses Act of 2025 amends the Internal Revenue Code to exclude certain bonuses paid to members of the Armed Forces from gross income. Specifically, it defines a "qualified bonus" as an enlistment, accession, reenlistment, retention, incentive, or other bonus paid by the Secretary concerned to a member in exchange for an agreement to accept a commission as an officer, extend an active service commitment, enlist, reenlist, or enter into a reserve affiliation agreement. This change applies to taxable years beginning after the date of enactment of the Act.