H.R. 6189: Service Members Tax Relief Act

The Service Members Tax Relief Act is a legislative proposal aimed at providing certain tax exemptions to individuals serving in the Uniformed Services of the United States. The key elements of the bill are outlined below:

1. Purpose of the Bill

The primary goal of this bill is to amend the Internal Revenue Code to exempt specific types of income earned by active or reserve service members from federal income tax. This means that certain earnings related to their military service would not be counted as taxable income.

2. Tax Exemption for Service Members

The bill proposes that:

• Any compensation received by active or reserve members of the Uniformed Services during the taxable year will not be included in their gross income for tax purposes.
• The term "compensation" specifically excludes pensions or retirement pay, meaning that while income earned while actively serving is tax-exempt, retirement income would still be subject to taxation.

3. Application of Exemption

The proposed amendments would take effect for income earned in taxable years starting after the bill is enacted. This suggests that service members could benefit from this tax relief as soon as the law is passed and implemented.

4. Administrative Changes

In addition to introducing the new exclusion for active service members, the bill includes a clerical update to the tax code, ensuring that the new section regarding the tax exemption is properly referenced in the legal text of the code.

5. Legislative Process

The bill was introduced in the U.S. House of Representatives by Mr. Hamadeh of Arizona, with co-sponsors Mr. Moore of Alabama and Mr. Massie. It has been referred to the Committee on Ways and Means for further consideration.

Relevant Companies

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