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Military retirees could keep more of each monthly check
The proposal from New Jersey Rep. Jeff Van Drew would exempt military retirement pay from the IRS's starting-point income figure, with the bill now in the House Ways and Means Committee.
New Jersey Rep. Jeff Van Drew's House bill would exclude military retirement pay from gross income — the amount the IRS uses as a starting point before deductions and credits — so retirees could keep more of each monthly check.
Gross income is the first number on a tax return, the total before deductions and credits. If the proposal became law, military pension income would no longer be counted in that initial tally.
The first number on the return
For retirees, that can matter every month. A pension that never enters the income calculation is easier to keep whole, especially in households using it for rent, groceries and health costs.
The proposal is narrow. It would not change the tax treatment of other retirement income. It would simply carve out Armed Forces pensions at the federal gross-income stage.