No Tax on Bonuses Act of 2025

HR 2565, the No Tax on Bonuses Act of 2025, would exempt certain military enlistment, reenlistment, and retention bonuses from federal income tax. It directly affects members of the U.S. Armed Forces who receive these specific bonuses in exchange for service commitments, including officers and enlisted personnel in active or reserve components. The bill amends the Internal Revenue Code to exclude "qualified bonuses" from gross income, defining them as payments made by the military for enlistment, reenlistment, or extended service. This change applies to taxable years beginning after the bill's enactment.