S. 3246: Service Members Tax Relief Act

The Service Members Tax Relief Act is a bill that proposes a modification to the current tax code to provide certain tax exemptions for members of the Uniformed Services of the United States. Here’s a breakdown of what the bill would do:

Tax Exemption for Service Members

The primary purpose of this bill is to exempt active and reserve members of the Uniformed Services from paying federal income tax on their compensation for their service. The details are as follows:

• Compensation Exclusion: The bill states that gross income shall not include any compensation received by active or reserve service members for their military service during the taxable year.
• Retirement Income Exclusions: It's important to note that this exemption does not apply to income received from pensions or retirement pay. Only active service compensation is included in this tax exclusion.

Implementation Details

The bill includes provisions for how these changes will be implemented:

• The amendment to the tax code will be made by adding a new section to the Internal Revenue Code that specifically addresses this tax exemption for service members.
• These amendments will take effect for income earned in taxable years that begin after the bill is enacted.

Summary of Changes

To sum up, the Service Members Tax Relief Act aims to:

• Eliminate federal income tax on earnings for active and reserve military personnel for their service-related compensation.
• Maintain the status quo regarding pension and retirement pay, which will not be included in this tax exemption.

Relevant Companies

None found.