No Tax on Drill Pay Act
- Sponsor
- Rep. Barr, Andy [R-KY-6]
- Committees
- Ways and Means Committee (primary)
- Last action
- Mar 12, 2026
Bottom line
The 'No Tax on Drill Pay Act' would make inactive-duty training compensation for military reservists and National Guard members exempt from federal income tax, aiming to provide financial relief and acknowledge their service.
What it actually does
This bill amends the Internal Revenue Code of 1986 to exclude compensation received for inactive-duty training from gross income. This means that members of the Reserve Components and National Guard would no longer pay federal income tax on their 'drill pay' received for their monthly or weekend training periods. The bill defines inactive-duty training by referencing section 101(d)(7) of title 10, United States Code.
Proponents argue
Proponents argue that this bill provides much-needed financial relief to military reservists and National Guard members, recognizing the unique sacrifices they make by balancing civilian careers with military service. They contend that exempting drill pay from taxes would increase take-home pay, making service more attractive and supporting military families, thereby enhancing readiness and retention for the nation's reserve forces.
Opponents contend
Opponents might argue that this tax exclusion would reduce federal tax revenue, potentially contributing to the national debt or requiring cuts elsewhere. They may also raise concerns about creating additional carve-outs in the tax code, which could increase complexity and raise questions of fairness compared to other forms of income that remain taxable, or other public servants whose compensation is fully taxed.
The bill is exceptionally short and clear, making it very accessible for any reader to understand its core purpose and provisions quickly.
Section 2(a) and 2(b)
Exclusion from Gross Income of Inactive-Duty Training Compensation
This provision amends Section 134(b) of the Internal Revenue Code of 1986 to include 'inactive-duty training compensation' as a 'qualified military benefit.' By doing so, any compensation received by members of the Reserve Components and National Guard for their inactive-duty training (often referred to as 'drill pay') would be excluded from their gross income for federal tax purposes. A conforming amendment updates existing references in the tax code to reflect this new exclusion.
Supporters argue
Supporters argue that this exclusion directly benefits those who serve in the Reserve Components and National Guard, providing tangible financial support for their commitment and the disruption their service causes to their civilian lives. They believe it acknowledges the unique nature of their part-time military service and the importance of retaining skilled personnel.
Critics contend
Critics might contend that while the intent to support service members is laudable, this specific approach creates a new tax expenditure that reduces federal revenue without a clear funding offset. They may also argue that it adds another layer of complexity to the tax code and could be seen as inequitable compared to other forms of income that remain taxable.
Tradeoffs
The bill navigates the tension between providing financial support and recognition for military service members and the broader implications for federal revenue and tax code simplicity. It aims to boost morale and retention in the reserve forces at the cost of a reduction in the federal tax base.