National Guardsmen and Reservists would no longer pay federal tax on their drill pay under a new House bill.
Introduced Friday by Rep. Andy Barr, R-Ky., the No Tax on Drill Pay Act, if passed, would exempt compensation from inactive-duty training from federal income tax.
Current law requires Guardsmen and Reservists to pay federal income taxes on compensation from drill pay.
“Members of the National Guard and Reserve answer the call to serve our country while balancing civilian careers and family responsibilities,” Barr said in a press release. “Ending federal taxes on a portion of their military pay will reward these patriots for their service to our country.”
He added that the bill would also “boost recruitment and retention, strengthen military readiness, and continue our commitment to treating our military better than any in the world.”
Reps. Zach Nunn, R-Iowa, a former Iowa Air Guard officer who now serves in the Air Force Reserve, and Max Miller, R-Ohio, who was in the Marine Corps Reserve, co-sponsored the bill.
Nunn said he often hears concerns from Iowa Guardsmen and their families about the financial strain of serving part time in the military while holding full-time civilian jobs.
“This bill is a straightforward fix: exempt drill pay from federal income taxes so more of that money stays with the families who earned it,” Nunn added.
Said Miller, “If we truly value the service of our Guardsmen and Reservists, the least we can do is let them keep every dollar they earn while preparing to defend our country.”
NGAUS strongly supports the legislation.
“Drill pay is not a bonus — it is compensation for time spent training to respond to emergencies, deploy overseas, and protect the homeland,” said retired Maj. Gen. Francis M. McGinn, the association president.
“Exempting inactive-duty training pay from federal income taxes recognizes that service, helps recruit and retain the force, and ensures Guardsmen are not financially penalized for answering the call,” McGinn added.
—By John Goheen