The BNA Fairness Act makes a change to how the military's basic needs allowance is taxed. Right now, service members who qualify for this extra monthly payment have to count it as income when they file their federal taxes, which can increase the taxes they owe. This bill would change that by allowing service members to exclude this allowance from their taxable income, just like they can already do with certain other military benefits.

Who does this affect? Military members who receive the basic needs allowance—which is available to those who have finished their initial training, have at least one dependent, and earn less than twice the federal poverty level for their household size. For these service members, the change means they'd pay less in federal income taxes because the allowance wouldn't count toward their taxable income. This could put more money back in their pockets, especially for lower-income military families who are already struggling to make ends meet. The bill essentially recognizes that this allowance is meant to help service members afford basic necessities, and shouldn't be taxed like regular income.

BNA Fairness Act

Womack, Steve

BNA Fairness ActThis bill excludes from gross income (for federal income tax purposes) the basic needs allowance received by eligible members of the Armed Forces.Under current law, members of the Armed Forces may be eligible to receive the basic needs allowance (additional monthly payment) if (1) they have completed initial training, (2) they have at least one dependent, and (3) their total household income does not exceed 200% of the federal poverty level (based on the location and number of individuals in the household). Further, under current law, certain qualified military benefits may be excluded from gross income. However, the basic needs allowance is not included within the definition of qualified military benefits and must be included in gross income for federal tax purposes.Under the bill, the definition of qualified military benefits that may be excluded from gross income is expanded to include the basic needs allowance.