FIGHTER Act of 2025

This bill amends the Internal Revenue Code to exclude regular compensation for active service in the Armed Forces from gross income, making it not subject to income taxes, and requires the Department of Government Efficiency to offset the revenue loss through cost-saving initiatives.

Sec. 2, Exclusion from gross income of regular compensation received by members of the Armed Forces: This section adds a new section 139J to the Internal Revenue Code, which excludes regular compensation for active service as a member of the Armed Forces from gross income. It does not apply to individuals who served as a Member of Congress in the prior 10 years. It defines 'active service' and 'regular compensation' under title 37 of the U.S. Code, and 'Member of Congress' as a Senator, Representative, Delegate, or Resident Commissioner. The Secretary of the Treasury must adjust withholding tables and procedures to account for this exclusion. The amendment applies to taxable years beginning after December 31, 2024.

Sec. 3, Government efficiency savings and expenditure reductions: The United States DOGE Service (Department of Government Efficiency) must implement cost-saving initiatives that reduce federal expenditures by at least the amount of the reduction in federal revenues caused by the tax exclusion in section 2.