Congressman Hamadeh Introduces Bills to End Income Taxes on Military Pay and Veterans’ Retirement

WASHINGTON D.C. – Keeping their promise to our nation’s heroes, Congressman Abe Hamadeh (AZ-08) and Senator Pete Ricketts (R-NE) this week introduced two bills, the Service Members Tax Relief Act and the Tax Cuts for Veterans Act, which amend the tax code to exempt all military income earned by active-duty and reserve service members and all service-related retirement payments from federal income taxes. 

The Service Members Tax Relief Act, as proposed, eliminates federal income tax on all active-duty and reserve service members' pay, including enlistment, retention, and education bonuses, as well as special and incentive pays for service members in all eight of the Federal Uniformed Services, including their Reserve and National Guard components on federal orders.

The Tax Cuts for Veterans Act of 2025 specifically amends Section 122 of the Internal Revenue Code to exclude all military retirement pay and related veterans’ benefits from federal income taxes. This includes all retired and retainer pay under Titles 10 and 14, and all VA-related monthly compensation, survivor, or disability-related payments, including under Titles 37 and 38.

“These bills are in keeping with my commitment to America First principles and advances President Trump’s Peace Through Strength agenda by alleviating the burdens on our service members in some small measure,” stated Congressman Hamadeh. “Our service members face high operational demands and cost-of-living pressures that outpace pay tables. So, anything we can cost-effectively do to ease those pressures, should be done.”

“These bills are fiscally conservative in that they offer relief through the tax code instead of new spending,” explained Congressman Hamadeh, a member of the House Veterans’ Affairs Committee. “It is a win-win; the exemption instantly improves take-home pay, while helping with recruitment and retention, which in turn keeps our war fighters strong.” 

“Our servicemembers and veterans sacrifice for the country. We owe them more than we can ever repay,” said Senator Ricketts. “That’s why I’m working to ensure these brave women and men keep all the benefits they earn during military service. We also need to make sure that service members are set up for success when they transition back to civilian life. These bills strengthen our support for Nebraska servicemembers, veterans, and their families.”

“We want to thank Congressman Hamadeh and Senator Ricketts for introducing these bills which will make a meaningful difference in the quality of life for many servicemembers and retirees. These tax cuts give veterans the financial breathing room they need as they transition to civilian life, empowering them to continue serving their communities,” stated Robert Garcia, Chairman of Vet2Gov. “At Vet2Gov, our mission is to ensure every veteran has the support, stability, and opportunities they need to thrive beyond their military service – and this legislation makes it easier for us to accomplish that goal.”

In September, the U.S. House of Representatives unanimously passed Congressman Hamadeh’s bipartisan bills, the Edith Nourse Rogers STEM Scholarship Opportunity Act and the Health Professionals Scholarship Program (HPSP) Improvement Act of 2025.

As a former U.S. Army Reserve Intelligence officer, and the only Arizona Member on the House Armed Services Committee, Congressman Hamadeh has been working to serve those who serve this nation.