Military Finance News
Pay, allowance and tax changes that actually affect Guard and Reserve members. We refresh this page daily and verify figures against primary sources before publishing them.
House passed its 2027 defense bill 216–212 with the bigger pay raise; the Senate is still stuck
The two chambers remain far apart on next year's military pay raise. The House passed its version of the FY 2027 defense authorization bill, H.R. 8800, by a near party-line 216–212 vote on July 22. It carries the administration's tiered "7-6-5" pay proposal, which would give the largest percentage increase to the most junior enlisted grades. The Senate's companion bill, S. 4784, never got that far — a vote to limit debate and let the bill reach the floor fell short 50–46 on July 14 and has not been retried. The Senate Armed Services Committee's version instead carries a flat 3.6 percent raise, the figure the statutory employment-cost-index formula produces. Because the chambers passed different bills, a conference agreement between the two still has to happen before anything reaches the President's desk.
Why it matters: basic pay drives drill pay — one drill period is one-thirtieth of monthly basic pay, so any January raise flows straight into what you earn on a drill weekend, and it can nudge the marginal rate you enter in the calculator. Nothing is settled until a final, reconciled bill is signed, historically in December. For what you are actually paid right now, use the 2026 tables, not a proposed number.
Source: Congress.gov — H.R. 8800, 119th Congress (all actions, including the July 22 House passage vote); Senate.gov — Roll Call Vote 119th Congress, 2nd Session, Vote 195 (cloture on the motion to proceed to S. 4784); DFAS.mil — 2026 Reserve Component drill pay table, enlisted.
Bill to make drill pay tax-free is still sitting in committee — drill pay remains taxable
A House bill would amend the tax code so that compensation for inactive-duty training — your monthly drill weekend and similar readiness periods — is excluded from gross income. It was introduced by Rep. Andy Barr of Kentucky and picked up a handful of cosponsors, several of whom have Guard or Reserve service themselves. The official title on Congress.gov is the plain-language version: a bill "to exclude from gross income compensation received in connection with inactive-duty training."
Why it matters: this is proposed, not law. As of today the bill has gone no further than its referral to the Ways and Means Committee, and drill pay is still fully taxable federal income. Plan and withhold accordingly. It also would not touch the travel deduction — that is a separate provision and it is already on the books, so if you drive more than 100 miles and stay overnight for drill you can claim it now. See who qualifies.
Source: Congress.gov — H.R. 7897, 119th Congress (bill status and actions); Barr.house.gov — sponsor's announcement of the No Tax on Drill Pay Act.
Per diem watch: GSA's file library still stops at FY 2026 — the release window is open now
We checked GSA's per diem file library again this morning rather than relying on the rate lookup. The newest master rate file it publishes is still the FY 2026 one — there is no FY 2027 file posted yet, and no FY 2027 news release either. The dates on the prior releases tell you what to expect: the FY 2026 rates were announced August 15, 2025, and the FY 2025 rates on August 12, 2024. That puts the FY 2027 release within the next several days to two weeks. Until it lands, the governing figures for standard-rate locations in the continental U.S. are $110 a night for lodging and $68 a day for meals and incidental expenses, and they hold through September 30, 2026.
Why it matters: the lodging and meal half of your reservist deduction is capped at these federal rates, with a reduced meal allowance on your first and last travel days. Annual training or a long duty period that crosses October 1 is not billed at one flat rate — each night uses the rate in effect on that date, so a September night and an October night can be worth different amounts. Anyone quoting you an FY 2027 lodging number today is guessing. Our per diem guide shows how to apply the current figures, and we will post the FY 2027 rates here the day they appear.
Source: GSA.gov — Per diem files (file library, verified Aug. 11, 2026); GSA.gov — Per diem rates lookup; GSA — FY 2026 CONUS per diem rates news release (Aug. 15, 2025).
IRS standard mileage rate is 76 cents from July 1 — 2026 is a split year
The IRS raised the business standard mileage rate to 76 cents per mile for miles driven on or after July 1, 2026, citing higher fuel prices. The rate for the first half of the year stays at 72.5 cents, the figure the IRS originally set for 2026. This was the first mid-year adjustment since 2022. The same change moved the medical rate — and the moving rate that still applies to a permanent change of station for Armed Forces members — from 20.5 cents to 23.5 cents. The charitable rate is fixed in statute and stays at 14 cents.
Why it matters: one 2026 return, two mileage rates. Every drill trip you drove before July 1 gets 72.5 cents and everything from July 1 on gets 76 cents, so a dated mileage log is doing real work this year — an undated annual total cannot be split correctly. Our calculator defaults to 76 cents for the current half of the year; run the earlier half separately at 72.5 cents and add the two. The mileage records guide covers what a defensible log looks like.
Source: IRS.gov — Standard mileage rates (rate table by period); IRS.gov — Internal Revenue Bulletin 2026-29 (July 13, 2026); IRS.gov — Topic 455, moving expenses for members of the Armed Forces.
The rule most reservists miss: your write-off is capped at the federal rates, not what you actually spent
If you travel more than 100 miles from home and stay overnight for Reserve or Guard duty, you can deduct unreimbursed travel — transportation, lodging and meals — without itemizing. The limit people trip over: the amount is capped at the rates authorized for federal employees, including per diem in lieu of subsistence. A $240 hotel in a $110-rate city gets you $110, not $240. The deduction moves from Form 2106 to Schedule 1, and anything above the federal rate is simply lost.
Why it matters: this is why our calculator asks for nights and meal days rather than receipts — the federal rate is the ceiling regardless of your actual bill. It is also why the 100-mile and overnight tests both have to be met; miss either one and the trip does not count. Walk-through in the Form 2106 guide.
Source: IRS.gov — Publication 3, Armed Forces' Tax Guide (reservist travel expenses); IRS.gov — Instructions for Form 2106.
Extension filers: October 15 is the deadline, and MilTax is still free
If you filed Form 4868 back in the spring, your extended 2025 return is due October 15, 2026. An extension moved the filing date, not the payment date — tax owed was due in April, and interest has been accruing since. Military OneSource's MilTax software is free for Guard and Reserve members and covers the reservist travel deduction; VITA sites on many installations do the same in person.
Why it matters: the 100-mile travel deduction is claimed above the line, so it lowers adjusted gross income even if you take the standard deduction. That makes it worth going back through last year's drill calendar before you file rather than after. Deployment to a combat zone or certain contingency operations can extend your deadline further — check the rules for your situation.
Source: MilitaryOneSource.mil — MilTax free tax services; IRS.gov — About Form 4868, Application for Automatic Extension.
TSP 2026 limits: $24,500 — and the limit follows you, not the account
The elective deferral limit for 2026 is $24,500 across traditional and Roth TSP contributions combined. Standard catch-up applies from age 50; under SECURE 2.0 there is a higher catch-up of $11,250 for participants who turn 60 through 63 during 2026, dropping back to the regular amount at 64. Higher earners — those whose prior-year FICA wages topped $150,000 — must make catch-up contributions as Roth.
Why it matters: the deferral limit is per person, not per plan. If you hold a civilian 401(k) alongside your uniformed-services TSP, contributions to both count against the same $24,500 — a common and expensive surprise for drilling reservists with a full-time civilian job. Contributions do not change what you claim on Form 2106, but a traditional contribution lowers taxable income, which can move the marginal rate you plug into the calculator.
Source: TSP.gov — Bulletin 25-3, 2026 TSP Contribution Limits; TSP.gov — Fact sheet, Annual Limit on Elective Deferrals (PDF).
How we handle this page
Every item here is checked against a primary source — irs.gov, gsa.gov, dfas.mil, tsp.gov, congress.gov and official announcements — before it goes up, and each carries a link to that source so you can confirm it yourself. Proposed legislation is labeled as proposed. When a figure changes we update the calculator and the affected guides at the same time. If you spot something out of date, tell us and we will verify and correct it.