FIGHTER Act Makes Active Duty Military Pay Tax-Free Starting 2025, Mandates DOGE Service Cuts to Cover Costs

The Fortifying Income by Giving our Heroes Their Earned-Tax Relief Act of 2025—mercifully nicknamed the FIGHTER Act—is aiming to give active duty service members a significant financial boost by making their regular compensation exempt from federal income tax. Essentially, if you’re on active duty, the pay you receive for that service won't count as gross income for federal tax purposes, meaning more money in your pocket starting with the 2025 tax year (Section 2). This is a massive change, and the Treasury Secretary is tasked with updating the withholding tables to make sure this happens automatically on paychecks.

The Fine Print: Who Gets the Break, and Who Doesn't

This is where things get interesting, and frankly, a little pointed. The bill explicitly carves out one group of active duty military personnel who don't get this tax break: anyone who served as a Member of Congress (Senator, Representative, etc.) at any point in the ten years leading up to receiving that military pay (Section 2). For the vast majority of active duty service members, this is a clear win—it’s like an instant raise without a change in their pay grade. For example, an E-5 with a spouse and two kids currently paying federal income tax on their base pay would see an immediate, tangible increase in their monthly take-home pay, helping them better manage rising costs of housing and groceries.

However, for the small, specific group of former politicians who return to active service, the exclusion means they are uniquely penalized, or at least, uniquely excluded from the benefit. It’s an unusual provision that applies the tax code differently based on a person’s prior civilian government service.

The Budget Offset: The DOGE Service Pays the Tab

Tax cuts cost money, and this bill tries to solve that problem upfront by forcing another government agency to cover the bill. The FIGHTER Act mandates that the United States DOGE Service must implement cost-saving plans to cut its federal spending by an amount equal to, or greater than, the federal revenue lost due to the new military tax exclusion (Section 3). This is the bill's attempt at being budget-neutral.

For the DOGE Service, this means they are now on the hook for finding potentially billions in savings. While the intent is to avoid adding to the federal deficit, the bill is vague about how the DOGE Service should achieve these cuts. Will this mean fewer services, delayed projects, or simply more efficient operations? That lack of detail leaves significant discretion—and a significant headache—for the DOGE Service leadership. For the average person, this could eventually translate into changes in the services provided by this agency, depending on where they decide to wield the budget axe. It’s a classic policy trade-off: a clear benefit for one group (military families) paid for by mandated, undefined spending cuts from another government service.