This bill would exempt the pay of federal employees who served or were wounded in combat zones from federal income taxes. The tax exclusion would end two years after the combat zone is no longer active.
Latest Action
Referred to the House Committee on Ways and Means.
AI Summary
Plain-English explanation of this bill
This bill would exempt the pay of federal employees who served or were wounded in combat zones from federal income taxes. The tax exclusion would end two years after the combat zone is no longer active.
Last updated: 12/29/2025
Official Summary
Congressional Research Service summary
<p><b>Federal Employee Combat Zone Tax Parity Act</b></p> <p>This bill excludes from gross income, for income tax purposes, the compensation of a federal employee who served in a combat zone or was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone. The bill terminates the exclusion two years after the end of combatant activities in such zone. </p>
Key Points
Main provisions of the bill
Excludes the pay of federal employees who served or were wounded in combat zones from federal income taxes
The tax exclusion ends two years after the combat zone is no longer active
This applies to federal employees, not military personnel
How This Impacts Americans
Potential effects on citizens and communities
If this bill becomes law, federal employees who served or were wounded in combat zones would see an increase in their take-home pay, as their combat-related compensation would no longer be subject to federal income taxes. This could provide financial relief and recognition for federal civil servants who served in dangerous combat areas.
Policy Areas
Primary Policy Area
Taxation
Related Subjects
Diplomacy, foreign officials, Americans abroad
Government employee pay, benefits, personnel management
Income tax exclusion
Military operations and strategy
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
227, 119th Congress (2025). "Clergy Act". Source: Voter's Right Platform. https://votersright.org/bills/118-hr-227