Tax Deductions For Military Personnel
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While military personnel do have tax obligations, they may also benefit from exclusions and deductions and it is very important to the Internal Revenue Service that those military personnel entitled to tax benefits take advantage of them.
Military Tax Deductions/ExclusionsAny U.S. servicemember who is serving in a combat zone or a qualifying hazardous duty area is entitled to exclude part of their pay from taxable income. Active duty pay earned in any month in a combat zone is exempt, as is military and imminent danger/hostile fire pay earned during hospitalization due to injuries sustained in the combat zone. If a servicemember reenlists while in a combat zone, his or her reenlistment bonus is exempt. Pay received for earned leave, club or mess duty or other non-appropriated fund activities in a combat zone are also exempt, as well as awards received due to a submission during a month serving in a combat zone.
Military Tax ExtensionsA tax extension is automatically granted to military personnel serving in a combat zone for at least 180 days after the last day of combat zone service or the last day of continuous qualified hospitalization for injuries sustained in the combat zone.
Military Combat Zones For Tax PurposesWhat is classified as a combat zone with regard to tax exemption may vary depending upon global political conditions. However, among the areas currently classified as combat zones are all of Iraq, Saudi Arabia, Kuwait, Oman, Bahrain, the United Arab Emirates, Qatar, Kosovo, Serbia and Montenegro, Albania and Afghanistan. Bosnia and Herzegovina, Croatia and Macedonia are considered hazardous duty areas with the same classification as combat zones for tax purposes. In addition, military personnel in certain areas that directly support combat zone operations have also been designated as eligible for combat zone tax benefits. These areas include Pakistan, Tajikistan, Jordan, Incirlik Air Base in Turkey, Kyrgyzstan, Uzebekistan, the Phillipines, Yemen and Djibouti. Again, these areas are not permanently established and are subject to change at any time.
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