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S. 1108: Tax Cuts for Veterans Act of 2025

The Tax Cuts for Veterans Act of 2025 is a proposed bill that aims to revise the federal tax treatment of military retirement and related benefits. Here’s how it would work:

Key Provisions

  • Exclusion from Gross Income: The bill proposes to exclude all military retirement pay and related benefits from federal income taxes. This includes any pay received under titles 10 or 14 of the United States Code, which pertains to the armed forces and the Coast Guard.
  • Related Benefits: In addition to military retirement pay, the exclusion extends to compensation, pensions, allowances, and annuities linked to disability or combat-related injuries sustained by service members.
  • Reduced Retirement Pay: For members of the uniformed services not classified as members of the armed forces, any reduction in retirement pay due to specific provisions in military law would also be excluded from gross income under this bill.
  • Definitions: The bill provides definitions for terms like “armed forces” and “uniformed services” as used in the context of military retirement benefits, ensuring clarity in its applications.

Conforming Amendments

  • The bill includes provisions to repeal an existing section of law relating to military retirement pay, thereby ensuring that the new exclusions take precedence.
  • It also makes necessary clerical amendments to various sections of the Internal Revenue Code to reflect these changes, ensuring consistency across the tax code.

Effective Date

The changes proposed in the bill would apply to taxable years beginning after the bill is enacted into law.

Impact

By enacting this bill, military veterans and service members can expect to see an increase in their net income due to the removal of federal taxes on their retirement benefits. This could potentially enhance their financial stability in retirement.

Relevant Companies

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This is an AI-generated summary of the bill text. There may be mistakes.

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Sponsors

3 bill sponsors

Actions

2 actions

Date Action
Mar. 25, 2025 Introduced in Senate
Mar. 25, 2025 Read twice and referred to the Committee on Finance.

Corporate Lobbying

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