Congress Eyes Tax Breaks for Military as Federal Workforce Legislation is Considered

Congress is about to consider several pieces of legislation that will impact the federal workforce and the U.S. military.

Under two bills, members of the U.S. military would pay no federal income tax. 

The Service Members Tax Relief Act (H.R. 6189) would eliminate federal income tax on all active-duty and reserve pay, including enlistment, retention and education bonuses and all special and incentive pays. Additional legislation (H.R. 6190) eliminates federal income taxes on military retirement benefits. 

One of the sponsors, Representative Abe Hamadeh (R-AZ) says it will help boost recruitment and retention. 

“This will help us keep the very best in our uniformed services,” Hamadeh told The Center Square. “Because military members face high operational demands and cost-of-living pressures that outpace the pay table, they will provide a level playing field for our service members.”

Companion legislation was introduced in the Senate. 

The measure would go well beyond previous tax-exemption proposals, which largely focus on bonuses or specialty pays.

Federal Workforce Bills Under Consideration

The House Oversight and Government Reform Committee is considering three additional pieces of legislation that could impact federal workers.

The Republican-sponsored bills are being marked up as the committee hosts its first markup session in almost two months. 

The EQUALS Act (H.R. 5750) would require most new federal employees to serve a two-year probationary period and compel regular evaluations throughout that period. 

The Official Time Reporting Act (H.R. 5749) aims a microscope on union representation. It would require all agencies to submit reports on how much official time is used in each fiscal year and justify increases in official time that may occur.

And the Federal Supervisor Education Act (H.R. 5810) would require agencies to work with OPM to create training programs on issues like performance management and productivity. 

Congress Returns with Large To-Do List

All this comes as Congress returns from Thanksgiving break with a big to-do list. 

At the top is passing the National Defense Authorization Act (NDAA). However, Republican disagreements over whether to include a passage limiting state laws curbing artificial intelligence (AI) is splitting the Republican caucus.

Also, Republicans are said to be growing more pessimistic of passing an extension of Affordable Care Act subsidies as the next government funding deadline looms at the end of January. 

Senate Majority Leader John Thune (R-SD) said “there are some significant sticking points” including a provision ensuring that federal money is not spent on abortion care.