Heroes’ Tax Exemption Act of 2025

HR 823, the Heroes’ Tax Exemption Act of 2025, would exempt active duty members of the U.S. Armed Forces from federal income tax on their military earnings. The bill adds a new section (139J) to the Internal Revenue Code, removing active duty pay from taxable income for service members. This change directly affects current active duty personnel, not veterans or reservists, and applies to income earned after the second October following the bill's enactment. The provision modifies the tax code without altering other tax rules or creating new administrative requirements. The bill focuses solely on removing income tax liability for active duty military compensation.