Congressman Abe Hamadeh of Arizona and Senator Pete Ricketts of Nebraska have introduced two bills aimed at providing federal income tax relief to military personnel during two stages of their carriers.
For relief to active-duty personnel, they introduced the Service Members Tax Relief Act, and for retired personnel they introduced the Tax Cuts for Veterans Act of 2025.
The Service Members Tax Relief Act
This bill is quite thorough because it applies to every form of currently-taxable military pay, as follows:
- Basic pay
- Enlistment, retention, and education bonuses
- Applies to all branches of the Federal Uniform Services
- Includes Reserve and National Guard components when on federal orders
The Tax Cuts for Veterans Act
This bill excludes from federal income taxes all military retirement pay, including:
- All retired and retainer pay
- All VA-related compensation, like survivor or disability-related payments
In a recent press release, Congressman Hamadeh explained his support for these two bills:
“These bills are in keeping with my commitment to America First principles and advances President Trump’s Peace Through Strength agenda by alleviating the burdens on our service members in some small measure. Our service members face high operational demands and cost-of-living pressures that outpace pay tables. So, anything we can cost-effectively do to ease those pressures, should be done.”
The other cosponsor of these bills, Senator Ricketts echoed that sentiment:
“Our servicemembers and veterans sacrifice for the country. We owe them more than we can ever repay. That’s why I’m working to ensure these brave women and men keep all the benefits they earn during military service. We also need to make sure that service members are set up for success when they transition back to civilian life. These bills strengthen our support for Nebraska servicemembers, veterans, and their families.”
Congressman Hamadeh is no stranger to the fight for tax relief. In February of this year, he cosponsored House Bill H.R. 1040, known as the Senior Citizens Tax Elimination Act. This bill is aimed at eliminating the double taxation of Social Security benefits for middle-class seniors.
H.R. 1040, if enacted, will restore to Social Security the principle of single taxation of income. This is best illustrated by observing that participants in 401Ks, IRAs, and other similar plans are fully taxed upon distribution but the income tax was deferred during the participants working years. By contrast, the income that generates Social Security payments was already taxed when earned and is now being taxed a second time.
H.R. 1040 is currently awaiting action in the House Ways and Means Committee.
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